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IMM currencies fall

in technical trade

CHICAGO: IMM currency futures closed lower, after a day of technical trade on Thursday.

"It was a technical (dollar) rally," Earl Johnson, Vice President at the Bank of Montreal said. "People were caught short... people thought the dollar was going down and had to scramble to buy dollars."

September yen began the session down, after overnight speculative buying in Tokyo pushed the dollar to 91.80 yen, or $0.010948 in September.

Lower-than-expected US jobless claims also put pressure on currencies, driving the nearby yen through key support. Traders said it triggered stops all the way down to $0.010812, a new five-month low.

Jobless claims rose 14,000 to 335,000 compared with economists' forecast for a rise to 348,000.

Once key technical levels were penetrated, a psychological element kicked in, one trader said. "It's like everyone just jumps on the bandwagon to see how high can the dollar go."

Another trader speculated that a large fund may have bought dollars in the cash market, putting further pressure on currency futures.

Finally, a fall in the mark also contributed to overall bearishness, traders said. Traders said the mark was dragged down by the yen but also hurt, to a small extent, by attempts by the Bank of Italy to bolster lira by selling marks. The mark broke through support to hit a new two-month low at $0.7030 in September.-Reuter