TEPID US jobs data depressed the US currency on Friday. After reaching a five month high against the deutschemark on Thursday, the US currency slipped back to 1.7275 DM and 111.90 yen. Treasury remarks suggesting intervention were at the root of the dollar/yen reversal. US data due for release this week is expected to show mild inflation, moderate gains in retail sales and industrial production, nothing that will excite the market. Consequently, the currency is likely to have a dull week trading around current levels against both the yen and the deutschemark. The pound ended the first week of the year back below 2.58 DM after climbing to a five month peak of 2.593 DM. Sentiment still appears to be pro sterling but traders will continue to sell the currency into rallies. Technically, a break through chart resistance of 2.5925 DM would signal a further rally. However, in our view the likelihood of this is slim, given the Bank of England's currency strategy. ERM currencies have had mixed results. The French franc surged to 3.3897 per mark but was pushed back to end the week at 3.397. The Danish crown also attempted a rally on the mark without success. The Belgian franc and the guilder, both of whose central banks reduced rates on Thursday, closed a shade higher against the deutschemark. Meanwhile, the peseta continued to weaken. Bank of Spain has reportedly been intervening to try to support the peseta but with unemployment in excess of 23 per cent and shrinking GDP, peseta devaluation is only a matter of time. The Australian dollar is holding steady around the US$68.5 level despite a drop in some key commodity prices. Pauline Gately is head of research at BNP International Financial Services Ltd Positive economic news should continue to support the currency in the near term. The Canadian dollar's advance above 1.32 to the US dollar was more a result of central bank intervention than investor interest. Neither currency is expected to move far in the coming week.