18 January 2001, 15:35 US FX Daily Outlook: Dlr/yen hits fresh 18-mo high, then falls
By James Thornhill, BridgeNews
New York--Jan. 18--Dollar/yen hit another 18-month high of 119.90
overnight amid heavy option-related buying, but was sold aggressively
ahead of the key 120.00 handle by investment banks. Bank of Japan governor
Masaru Hayami said the yen weakness was temporary. Euro/dollar found good
support from a dollar/Swiss franc sell off, but held inside Wednesday's
range of 92.88-94.50 cents.
* * *
Dollar/Swiss franc hit a three-day low of 1.6185 on hawkish comments
from Swiss National Bank president Jean-Pierre Roth and worries over
Nestle's $10.3 billion bid to buy U.S.'s Ralston Purina.
Sterling fell a touch against the euro and dollar on the back of a
disappointing 0.1% monthly rise in U.K December retail sales.
Meanwhile, dollar/Canada traded a narrow 1.5091-1.5122, showing little
immediate reaction to Canadian December inflation data at the top end of
market forecasts (up 0.1% on the month, up 3.2% on the year).
U.S. traders have again missed the boat on USD/JPY's latest move up
and that pair could see further consolidation in U.S. trade today. The
120.00 level is likely to be a tough nut to crack amid talk of weighty
option plays there.
U.S. December housing starts (0830 ET) and the Philly Fed's January
business outlook (1000 ET) top the data agenda, while Fed governor Edward
Gramlich (1445 ET) and St. Louis Fed president William Poole (1800 ET) are
on the speaking schedule.
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