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IMM currencies end mostly lower in light trade

CHICAGO: IMM currency futures ended mostly lower on Friday in extremely light trade.

June yen quietly consolidated modest gains, traders said. Light hedge fund buying boosted the contract early but prices failed to clear initial resistance at $0.009600.

Traders were already looking to the release of Japanese October to December gross domestic product due Monday.

"The number is supposed to be weak, about an annualized decline of 4.0 percent," said David Ethridge, director of currency analysis at Standard & Poor's MMS.

Economists polled by Reuters forecast Japanese GDP to decline 1.0 percent quarter over quarter.

"The short-term bias in the market is that dollar/yen could get back down to the 105 area but the Bank of Japan will be there," Ethridge added.

Yen strength was tempered earlier this week when the Japanese central bank sold yen for dollars in the spot market. BOJ officials have indicated that they will continue to attempt to limit yen appreciation.

However, speculation of Japanese fund repatriation in front of their fiscal year end on March 31 continued to underpin the contract, traders said.

June euro ended near unchanged on the week after setting new contract lows of $0.95880 on Wednesday.

The market was pressured initially following weak German economic data, but activity in the pits was subdued. The contract managed to limit losses in front of $0.96500 support.

The European Central Bank meeting is the focus for next week. Analysts said they were split on whether the ECB would raise rates following hawkish rhetoric this week.

"A minority think they might (tighten) next week, the majority of people think the better meeting is late in March," Ethridge said.

Although traders said there may be additional upside in the June euro short term, most expected strength to be met by sellers.

A technician pegged the next downside target at $0.95800.

At settlement, June yen was $0.000031 higher at $0.009574, euros down $0.00490 at $0.96930, Swiss francs down $0.0040 at $0.6042, sterling down $0.0044 at $1.5770, Canadian dollars down $0.0002 at $0.6872, Australian dollars down $0.0004 at $0.6154 and Mexican pesos down $0.000350 at $0.104475. March 10 IMM currency futures finished mostly lower in a quiet trade. June yen spent the afternoon consolidating modest gains below resistance at $0.009620. The market was biding time in front of Monday's release of October-December Japanese GDP. June euro spent the session at lower levels, in line with the trend, but the market will be hesitant to make a major move in front of next week's ECB meeting, traders said. Support was pegged at $0.96500.-Reuters