CURRENCY FUTURES CLIMB LIKELY TO BE CHECKED

  The surge in currency futures since
  Friday on the heels of the Reagan administration's proposed
  tariffs on Japanese imports is likely to be curtailed in the
  coming week, financial analysts said.
      "The market is taking a breather now, and I would expect it
  to last a little longer," said Craig Sloane, a currency analyst
  with Smith Barney, Harris, Upham and Co.
      Profit-taking, which robbed the currency futures of some
  momentum today, is likely to continue, he said.
      Central banks are likely to play a role in halting the
  advance in currencies through intervention, the analysts said,
  even though the dollar fell to a 40-year low against the
  Japanese yen on Monday despite Bank of Japan intervention.
      Treasury Secretary James Baker's comments that the G-6
  nations remain committed to the Paris accord, coupled with his
  refusal to give any targets for exchange rates, provided a note
  of stability to the market Tuesday, the analysts said.
      Furthermore, Merrill Lynch Economics analyst David Horner
  said G-6 central banks haven't yet shown the full force of
  their commitment to the Paris accord.
      "I'm among those who believe the G-6 have a plan behind the
  scenes," Horner said.
      Horner said more forceful central bank intervention will
  firm the dollar and cap the rise in currency futures.
      "Coordinated, punishing intervention" by the central banks
  -- in contrast to the recent rolling intervention which has
  only smoothed out the market -- is in the offing, according to
  Horner.
      "I think we're near the top of the range in the Europeans
  (currencies)," he said.
       On the other hand, the upside target for the yen, which
  set a new contract high today at 0.006916 in the June contract,
  is at 0.007050, Horner said.
      Still, other analysts believe currency futures have yet to
  peak.
      "The basic trend in the currencies is higher," said Anne
  Parker Mills, currency analyst with Shearson Lehman Brothers
  Inc. "The market wants to take the dollar lower."
      Uncertainty over central bank action and nervousness over a
  G-5 meeting next week in advance of a meeting of the
  International Monetary Fund could make for choppy price
  activity the remainder of the week, Mills said.
      In addition, although the market shrugged off relatively
  healthy gains in February U.S. leading economic indicators and
  factory orders Tuesday, economic data could play a larger role
  in coming sessions, the analysts said.
      Friday's employment statistics in particular will be
  closely watched, Sloane said, adding that a forecast rise of
  250,000 in non-farm payroll jobs should underpin the dollar.
  

