U.S. Market January 15, 2001

With American banks on holiday and the equities and the futures markets closed, volume in the New York currency markets barely ticked over today but that did not prevent usd/yen from climbing to its highest level in almost 18 months. Concern over the parlous state of the Japanese economy weighed heavily on the yen, which sank to over 119 to the dollar at one point in the afternoon. The seeming disinterest of Japanese officials in the yen’s fall is supporting the usd as well. The eur/usd spent the bulk of the day within 15 points of its 0.9410 low. It was pulled down by a speculative drop in Swiss franc against the usd, based on talk that Nestle will purchase Ralston Purina and would need to sell large amounts of Swiss francs for dollars if the deal takes place. In addition Friday’s more robust than expected American retail sales figure allayed fear of a spiraling U.S. economic slowdown.

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