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IMM currencies up

after late buy-stops

CHICAGO: Most IMM currency futures on Thursday closed up after an afternoon have of buy-stops were triggered as the US dollar started to slide in the cash market.

Traders said currencies' rise was led by yen. Some traders linked the start of the yen's rise to an investor starting to unwind a one-year, over-the-counter dollar/yen options position at a loss. The entire original position was estimated to have been worth at least a couple of billion dollars, traders said.

But September yen's gains were capped by a large, privately held US firm's orders to sell, traders said.

The firm offered to sell 2,500 September yen at $0.010465 late in the day, traders said. But the firm was only able to sell 1,000 and then tried to offer 1,500 at $0.010395 but did not get the last batch, traders said.

On the way up, another US firm bought 1,000 September yen between $0.010250 and $0.010257 and then bought another 500 just below those levels and at $0.010269, traders said.

Yen's rise pulled September marks up, triggering buy-stops near $0.6790 and $0.6800, traders said.

September pounds fell to a contract low early as a large, privately-held US firm sold 400, traders said.

But by about midday, some traders said a large order to buy sterling in the cash market helped push September up. Further gains were made when the yen jumped, traders said.

September Canadian dollars slid after trading choppily most of the day. Funds were seen on both sides of the market through various US firms, traders said. Banks were mostly buyers they said.

But September was still seen mostly in a range between $0.7344 and $0.7364 with a slight downward bias as it works its way down to about $0.7300 to fulfill an Elliot Wave objective before rallying again.

Options activity was moderate with a large French firm's retail desk buying 500 March $1.42 pound puts at 11.15 percent with futures, traders said.

In mark options a large US brokerage firm bought 150 third week September $0.6800 straddles at 14.65 percent and another large US firm sold 300 of the same straddles at 14.5 percent, traders said.

At-the-money implied September mark volatilities closed at 14.7 percent, Swiss francs at 15.3 percent, yen down at 16 percent, pounds up at 10.2 percent, Canadian dollars at 6.2 percent and French francs at 12.2 percent.

Near the open, prices rose on a wider-than-expected US June trade deficit and a sharp drop in exports. But currencies quickly slid back on a narrowing of the trade gap with Japan. From there, activity was choppy and quiet until the afternoon.

Prices were muted to a rise in US weekly jobless claims and a strong Philadelphia Federal Reserve index. On Friday, University of Michigan consumer sentiment is due.

September marks ended up $0.0034 at $0.6804, Swiss francs up $0.0060 at $0.8207, pounds up $0.0084 at $1.5484, yen up $0.000098 at $0.010367, Canadian dollars down $0.0010 at $0.7345 and Australian dollars down $0.0006 at $0.7211.-Reuter