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IMM currency futures end mixed, euro pops up late

CHICAGO: IMM currency futures ended mixed on Friday as a sharp intraday US stock selloff led to a flurry of buying in the March euro and Swiss franc.

March yen also ended slightly higher, while March sterling eroded sharply and underperformed the other contracts, traders said. March Canadian dollars settled lower, while Australian dollars ended with moderate gains.

Lisa Finstrom, a senior currency analyst at Salomon Smith Barney Inc., said the US stock weakness led to some covering in the afternoon, but noted that volume was generally light in New York trading hours.

"There was just a little flurry, helping to gain a little ground, but the response was muted," Finstrom said.

The March euro and Swiss franc set daily highs at $0.9899 and $0.6175 late, but lacked much momentum overall.

The market has a lot to digest next week, including Federal Reserve Chairman Alan Greenspan's semi-annual Humphrey-Hawkins testimony that will dominate from the US perspective.

The contracts held inside overnight ranges early. Some fund buying propped March yen near midmorning and March euro and Swiss francs trimmed losses on moderate buying, traders said.

The expectation that Japanese gross domestic product for the October to December quarter will show a decline has weighed on yen. The currency has been propped in anticipation of fund repatriation for the end of the fiscal year.

March yen "might head higher, but I am not holding my breath," one currency futures trader said.

The contract held support near $0.009150 overnight and tested that area early in pit trade before rebounding. Market talk of large stops and exotic options above 110 spot in dollar/yen helped curb yen losses, traders said.

March sterling eroded to a one-week low at $1.5872 on fund selling that triggered stops. The contract then pared losses.

Weak U.K. industrial production data for December added to perceptions that the Bank of England may be near the end of a tightening cycle, traders said. The Fed is seen continuing to tighten near-term.

Finstrom noted that economic data in Britain has been mixed lately. Earlier strong data had the market leaning toward a 50-basis-point rate hike this week, while more recent numbers have left the market expecting no tightening near-term.

At settlement, March yen was $0.000003 higher at $0.009228, euros up $0.00070 at $0.98900, Swiss francs up $0.0010 at $0.6167, sterling off $0.0148 at $1.5938, Canadian dollars off $0.0014 at $0.6897, Australian dollars up $0.0015 at $0.6325 and Mexican pesos up $0.000150 at $0.105275. Feb 11 IMM currency futures ended mixed. March euro and Swiss francs turned higher late as US stocks set intraday lows. March yen ended slightly higher. Jitters over Japan's economic prospects pressured yen, but expectations that fiscal year end fund repatriation will begin soon, added support. Weak recent UK economic data weighed on sterling, added to sentiment that the BOE is nearing the end of a tightening cycle.-Reuters