U.S. Market February 21 , 2001

The US Dollar held onto most of its intra-day gains against the major currencies, despite another day of US equity weakness. The Dow Jones dropped 204 points while the NASDAQ fell two percent. The US equity weakness helped the Euro back near 91 cents after tumbling to .9060 area from session highs at .9180 cents. Sterling fell against the dollar and the Euro on Wednesday after the minutes of the Bank of England Monetary Policy Committee's February meeting reinforced expecatations of further interest rate cuts in the near-term.

Major US economic releases on Wednesday included CPI which rose 0.6 pct vs. forecasts for a 0.3 pct rise and Dec's 0.2 pct rise. Core prices rose 0.3 pct, vs. forecasts for a 0.2 pct rise and Dec's 0.1 pct rise. U.S. international trade gap in Dec narrowed a touch to $32.99 bln, vs. forecasts for $32.18 bln and Nov's $33.13 gap.

ECB vice chairman Trichet stated n an interview with CNN that his comments about a strong euro did not necessarily conflict with U.S. Treasury Secretary Paul O'Neill's recent remarks confirming Washington's strong dollar policy. US Economic advisor Lawence Lindsey also reaffirmed the US’s strong Dollar policy.

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