US data awaited next week (page 2 of 2)

interest rates. Meanwhile, as expected the Bank of Japan kept its monetary policy unchanged.

However, BoJ Governor Toshihiko Fukui confirmed that one policy board member had disagreed with the board's decision to keep monetary policy unchanged. He also added, "the BoJ will remain committed to a quantitative easing based on the CPI (consumer price index)"

As the week came to an end, the yen managed to regain some of its losses after Japan's core private sector machinery order, a key gauge of trend in capital spending, rose 4.9 percent in February from a month earlier, well above market expectations.

Range for this week: Y106.75-Y109.75

Sterling

As the week started sterling managed to regain some of its looses supported by economic data showing a rise in British house prices and a strong service sector.

Data from the Halifax, the nation's largest mortgage lender, showed prices up 0.5 percent in March and underscored expectations that Britain's housing market is stabilising.

Meanwhile, activity in the country's service sector expanded at its fastest pace in almost a year in March, according to the Chartered Institute of Purchasing and Supply/NTC main service sector index.

Sterling failed to hold to its gains after data underlined the fragility of the British manufacturing output, which fell for the first time in six months in February. Furthermore, Bank of England kept its interest rate unchanged at 4.75 percent.

Meanwhile, BoE has identified the consumer spending as the biggest downside risk to the economic outlook and so far the marked slowdown seen at the end of 2004 appears to have extended into 2005. Policy makers are hoping the slowdown is temporary.

BoE Governor Mervyn King has pointed out that data around the turn of the year are always difficult to interpret. Furthermore, analysts said uncertainly ahead of a British general election on May 5 could start to weigh on sterling as opinion polls suggested a closer contest than any since 1992.

Next week investors will ponder the prospects for interest rates in the UK, with data due on the labour market and the retail sector.

Range for this week: $1.8700-$1.9000