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IMM currency futures end mostly weaker

CHICAGO: IMM currency futures ended mostly weaker, with market wariness of recent euro volatility as well as uncertainty over the upcoming European Central Bank meeting keeping the March euro rangebound toward the latter part of the session.

March euros opened weak and briefly traded near unchanged before slipping to new session lows. The contract breached support at $0.96980, a previous contract low, and further support at $0.96670 to hit a $0.96320 daily low.

Nearby euros spiked higher during electronic trade, lifted by talk of central bank intervention, traders said. The contract pared those gains after the Bundesbank and European Central Bank declined to comment on the issue.

The contract then recovered off of lows and slipped into a range, and one IMM currency futures trader said the talk of intervention capped March euro's losses.

"The only thing that's saving it from continuously being battered and beaten is this 'people want to think there's going to be intervention' type talk," he said.

Also hanging over the market is jitters about the ECB's meeting Thursday. While only three of 33 economists polled by Reuters expected the ECB to tighten credit this week, the market still considers a rate hike a possibility, said Mike Malpede, senior Foreign Exchange Analyst at Refco, Inc.

"There is still a great deal of uncertainty about whether or not the ECB will move on monetary policy on Thursday," Malpede said.

March Swiss looked to the euro for direction, with one hedge fund selling about 1,500 contracts on the day.

March yen traded in a range for much of the session but slipped below support at $0.009100 to a $0.009098 pit-session low minutes before the close.

"The economic numbers from Japan were somewhat disappointing today, and that put the yen on the defensive," Malpede said during late morning trading.

March sterling remained under pressure the entire session, in spite of one hedge fund buying 1,000 contracts soon after the open of pit trade. Comments from British officials thwarted expectations of further credit tightening, which weighed on nearby sterling.

At settlement, March yen was off $0.000073 at $0.009100, euros off $0.00550 at $0.96720, Swiss francs off $0.0030 at $0.6027, sterling off $0.0148 at $1.5794, Canadian dollars off $0.0002 at $0.6896, Australian dollars up $0.0053 at $0.6189 and Mexican pesos up $0.000125 at $0.106275.-Reuters