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IMM currency futures

mostly lower

CHICAGO: IMM currencies on Friday ended an afternoon of quiet trading mostly weaker after finding little impetus to give them momentum to breach technical levels.

June Sterling popped up to the day's peak on the close when one outside player bought 1,000 contracts, traders said. Such orders often have magnified impact in thin trade, and Friday's estimated board volume in June Sterling was only 7,900 contracts.

Orders flows in other pits generally stayed light after the week's earlier gyrations, and steep rallies in U.S. Treasury bond and stock index future had only slight downward impact.

T-bond futures expanded early gains and rallied nearly two full points, lifted by perceptions that U.S. inflation is not soaring, that the Federal reserve is on-hold with credit policy, and by technicals.

Consumer prices rose 0.4 percent overall and 0.3 percent excluding food and energy, very slightly above forecasts, while retail sales rose 0.1 percent, below expectations.

Pullbacks in commodity prices after recent surges and an unexpected drop reported in consumer sentiment also aided U.S. bond and stock markets and helped keep currencies under slight pressure, traders said.

"Any way you cut it, the dollar's in good shape," said a currency floor broker, who said he thought recent inflation fears from rising commodity prices had been far overblown.

"Even if wheat prices doubled, it would only raise the price of bread 10 cents," he recalled hearing during a recent discussion with economists.

During the morning, June marks found support again near the contract low at $0.6662, roughly 1.3070 spot, but proved unable to move much to the upside either. Several brokers cited 1.51 to 1.52 spot levels, or $0.6649 and $0.6605 respectively, as likely near-term objectives.

Mark traders also wait for the April 18 Bundesbank council meeting, with many looking for the German central bank to lower interest rates another notch.

Sterling withstood the U.K. by-election, which cut the Conservatives' parliamentary majority to one seat, a result the market had expected and which had scant effect.

At settlement, June yen fell $0.000010 to $0.009294, mark lost $0.0011 to $6674, Swiss francs dropped $0.0046 to $0.8200, sterling rose $0022 to $1.5136, Canadian dollar firmed $0.0002 to $0.7378, Aussie dollar added $0.0011 to $0.7885, and the Mexican peso rose $0.000450 to $0.126150.-Reuter