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IMM currency futures close

mostly lower

CHICAGO: IMM currency futures on Tuesday closed mostly down, having shown little reaction to the much anticipated $18 billion U.S. treasury auction of three-year notes.

Traders called the first refunding leg, which resulted in an average yield of 5.997 percent, disappointing.

"It was too neutral to push (currency futures) one way or the other," one trader said, adding "It was a really, really boring close."

Most of the day's action came from small speculators with few, if any, banks participating, he said. Only one large futures broker was a noted buyer of sterling, he added.

Pete Grant, a senior foreign exchange analyst with MMS International, expects the September yen could dip to $0.010910 but will lose momentum as it declines.

"I'm looking for these losses to start running out of steam. We're very oversold at this point," he said.

The September mark stayed above $0.7090, an important support level set July 13, Grant noted. If it breaks below that level, he's looking for it to drop to June lows of $0.7050 to $0.7059, before losing speed.

At settlement, September yen futures were off $0.000017 at $0.010989, the nearby mark was off $0.0001 at $0.7114, Swiss francs were off $0.0010 at $0.8596, sterling rose $0.0002 to $1.6010 and the Canadian dollar was off $0.0009 at $0.7360.-Reuter