24 January 2001, 11:30  Europe FX Opening: Summary of overnight moves and what's ahead

* EUR, Antipodean currencies drift lower
* Beckner, Gramley enliven debate on US rate
* BBK's Welteke indicates ECB rate cut not on the agend
* ECB's Duisenberg and Issing speak today
* GBP focuses on BOE MPC minutes and CBI quarterly industrial trends survey
--The EUR edged a little lower, while Antipodean currencies also suffering in a subdued overnight session. Trading remained dampened by the Chinese New Year, with Singapore and Hong Kong markets both closed.
--A US investment house was said to sell EUR/USD down to 0.9344 in New York, only for the pair to steady in a 0.9344-68 range in Asia. Pressure came from better-than-expected Q4 earnings from BroadCom and Compaq after the bell, which boosted US stocks futures, and from reports that Fed-watcher Beckner sees only a 25-bp cut in US interest rates next week.
However, US's Lucent offset the good earnings news by announcing it plans 10,000 in layoffs, and ex-Fed's Gramley maintained the uncertainty over the US rates outlook by forecasting a 50-bp easing from the Fed next Wednesday. Fed's McDonough also said central banks can focus too much on inflation. Offering EUR/USD support, BBK's Welteke told Germany's Boersenzeitung newspaper that "I don;t think the ECB needs to follow the US Fed rate cut." The BBK's monthly report, however, said German domestic demand was "rather contained" and that price pressures have "eased somewhat." Also of interest, the Euroframe group of economic institutes forecast euro zone GDP would be 2.8% this year, while the FT Deutschland said the German government will forecast domestic growth of "about 3%" for this year. Ifo head Sinn said the ECB should raise its inflation forecast to 2.5% y/y from 2.0% y/y.
The FT reports the EU may critize Ireland for its expansiona ry policies. For today, final December French CPI data are due 0745 GMT and Dutch January consumer confidence at 0800 GMT. ECB's Duisenberg speaks at 0900 GMT and ECB's Issing at 1400 GMT. Preliminary German January CPI data are also possible.
--EUR/JPY played a key role in EUR/USD's retreat, slipping to 108.95 and dragging USD/JPY down to 106.53. However, both have recovered amid a 6.5% y/y drop in Japanese December chain store sales and ongoing controversy over the KSD bribery scandal. BOJ Governor Hayami said most Japanese banks can deal with low stock prices heading into the Mar. 31 fiscal year end.
--The GBP took its cues from EUR/USD overnight, but could come under some pressure in Europe from reports that UK's Cinven and Investcorp are bidding 1.2 bln EUR for Germany's Degussa Metals. The FT quotes an EU report saying the euro zone should copy the UK's tax and labor market reforms to boost growth.
The minutes of the BOE MPC's January meeting are due 0930 GMT and the CBI's quarterly industrial trends survey at 1100 GMT.

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