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The euro jumped 1% overnight. But the market awaits its general direction from comments by

Fed Chairman

Alan Greenspan that will be delivered to the House Banking Committee later this morning.

"People are a little bit worried about Greenspan," said Jeremy Hawkins at

Bank of America

in London. "The risk is that he goes into a less dovish mode. More important will be the



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) later in the week." The data will be released Friday.

The euro is opening significantly firmer at $0.9400 after touching highs of $0.9430. Traders say the euro's gains are on the back of the latest

European Central Bank

funding auction. It produced a weighted average yield of 4.31%, slightly higher than the 4.30% that had been expected.

Consumer prices in Germany rose a preliminary 0.4% in July for a 1.8% year-on-year increase.

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"As much as anything it's a rally in the Swissy," said Hawkins of the Swiss franc. "People are looking towards next week's ECB meeting and wondering about an interest rate rise," he said.

The euro is continuing to gain on the yen and is opening more than 1% firmer at 102.60, after last night's close at 101.35.

The yen moved above 109, to an opening level of 109.20. The weak performance is in part because the economy is still unconvincing, with no strong evidence that solid consumer-based growth is achievable. The recent bankruptcy of the


department store chain is keeping investors nervous about the strength of the corporate sector. And continuing rumors that

Moody's Investors Services

will downgrade Japan's sovereign credit rating have added to the yen's woes. The picture is not enhanced by what has been a mediocre record for the Japanese stock market, which seems unable to put together a winning rally.

Despite these negatives, there are strong rumors, published in today's

Sankei Shimbun

newspaper, that the

Bank of Japan

will raise interest rates at its August 11 meeting.

Dollar/Swiss franc is much weaker at 1.6523. The euro/Swiss franc rate is unchanged at 1.5530.

The pound is virtually unchanged at $1.5160. Euro/sterling is higher at 62.00 pence.

The Canadian dollar is opening slightly off from yesterday's best levels, at C$1.4675. The currency is seen as fundamentally sound, and Canadian equity markets are performing well.

The Australian dollar is still soft at $0.5850, with important inflation data for the country due tomorrow. The New Zealand dollar is steady at $0.4615.

The South African rand continues to show some volatility and is opening this morning at 6.95, having touched lows of 6.96 earlier in the day in Johannesburg. In addition to political influences, the market for the rand is small and is pushed around by movements in the euro and the dollar.

The Polish zloty is firmer at 4.29 per dollar.

The Mexican peso is opening lower at 9.36.

The Indonesian rupiah is lower at 9,050, with rumors of the ill health of

President Abdurrahman Walid.

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