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IMM currency futures end active session mixed

CHICAGO: IMM currency futures ended mixed Tuesday in a session marked by heavy volume session as the June yen rallied to new one-month highs on more speculation of Japanese repatriation.

Traders said weakness in US equities underpinned currency futures but the euro still managed to break to new all-time lows of 101.06 in euro/yen spot.

"While we haven't seen movements reflecting patriation in the underlying assets, what we have heard is increased hedging on the underlying assets by the Japanese investors," said Allison Montgomery, foreign exchange analyst at IDEAglobal.com.

The June yen rallied to new one-month highs of $0.009620 on short covering amid heavy trade.

The contract ended higher but was unable to close over the 50-day moving average of $0.009594.

Traders said there was more risk for losses on yen crosses this week.

However, Montgomery added that "next week you have Japanese GDP, which may start to offer dollar/yen some support if it comes in as weak as the market is expecting."

June euro spent the session at lower levels but dropped to new contract lows of $0.95950 on euro/yen selling.

Initial losses stemmed from a weaker-than-expected rise of 0.5 percent in January German industrial production.

The upward revision to 6.4 percent from 5.0 percent in US fourth-quarter non-farm productivity also weighed on prices.

Traders said they expected continued weakness in June euro.

Focus was on the Bank of England meeting Wednesday and Thursday.

"We are looking for steady rates there on Thursday and looking for that to put pressure back on cable," Montgomery added.

Traders expect this to pressure the June sterling as the US Federal Reserve has suggested they will raise rates this month.

Traders pegged support in June sterling at the contract low $1.5690.

At settlement, June yen was $0.000127 higher at $0.009588, euros off $0.00200 at $0.96390, Swiss francs off $0.0007 at $0.6019, sterling up $0.0034 at $1.5778, Canadian dollars off $0.0007 at $0.6894, Australian dollars up $0.0015 at $0.6042 and Mexican pesos up $0.000825 at $0.104925.-Reuters