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IMM currency futures end down sharply

CHICAGO: IMM currency futures ended down sharply, with a stronger dollar forcing heavy to moderate selling in most contracts on Friday.

"It's been relentless," said one IMM currency futures trader of the selloff before the close of pit trade.

The March euro fell sharply for a second consecutive day, and other contracts soon came under pressure as well.

"What happened was that the dollar buying spread from the euro to the yen and other currencies. In other words, instead of it being the euro weak, it became the dollar being strong," said David Horner, senior financial strategist at Merrill Lynch Global Research.

The perception of a lack of concern from European Central Bank officials over the euro's current levels prompted traders to push the currency lower, traders said.

"They'd better (intervene), or we'll be trading at zero very soon," the trader said.

Interest rate and growth differentials between the United States and Europe also weighed heavily on the euro again Friday, analysts said.

The March euro opened lower and pared losses slightly after the release of stronger-than-expected U.S. data. Fourth quarter gross domestic product rose 5.8 percent, versus a 5.3 percent forecast rise, and the employment cost index was up 1.1 percent, versus an expected 0.9 percent rise.

The contract soon tumbled lower and set several successive fresh all-time lows. March euros fell below support $0.98040 and $0.97840, with support at $0.9710 holding throughout the session.

March yen fell below key support near $0.009460, the lower end of the recent range in which the contract had been trading. Traders said a break below that area would renew interest in the currency.

March Swiss francs moved in sympathy with the euro and set a new contract low at $0.6067.

At settlement, March euros were off $0.01050 at $0.98030, yen off $0.000190 at $0.009405, Swiss francs off $0.0060 at $0.6097, sterling off $0.0176 at $1.6208, Canadian dollars off $0.0057 at $0.6931, Australian dollars off $0.0231 at $0.6316 and Mexican pesos off $0.000400 at $0.102750.-Reuters