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IMM currency futures end higher, off highs

CHICAGO: IMM currency futures ended higher but off highs as traders took direction from US equity markets overnight and throughout the pit session Monday.

Weakness in US stocks on electronic trade and into pit trade lent support to IMM currencies. When stocks pared losses, however, contracts came under selling pressure.

"It mirrored the stock market recovery," said Mike Malpede, senior analyst at Refco, of IMM currency's declines that began in early morning dealings.

The most dominant feature of the day's dealings was selling of the euro/yen cross, traders said.

"Most of the movement was in the euro/yen and the dollar/yen," said one IMM currency futures trader.

June yen pierced resistance at $0.009693 early with its $0.009698 session high. In spite of a larger than expected drop in Japan's gross domestic product for the fourth quarter, corporate capital spending unexpectedly rose.

"There's hope that investment spending is increasing, which may mean the economy is improving, so the yen got a boost from that," Malpede said.

Concern over Bank of Japan intervention to stem the rising yen contributed to pressure on the June yen, which slipped below intraday support at $0.009642.

Comments from Eurozone officials that stoked expectations of a credit tightening in Europe supported the June euro overnight, Malpede said.

The nearby euro pared gains, breaching support at $0.97320 and setting a $0.96770 session low.

At settlement, June yen was $0.000052 higher at $0.009626, euros up $0.00150 at $0.97080, Swiss francs up $0.0002 at $0.6044, sterling up $0.0016 at $1.5786, Canadian dollars down $0.0015 at $0.6857, Australian dollars up $0.0012 at $0.6166 and Mexican pesos up $0.000150 at $0.104625. -Reuters