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IMM currency futures

erode gains

CHICAGO: Gains eroded in late pit trade, and IMM currency futures finished mixed and near session lows on Tuesday.

Traders said action stayed subdued, with the afternoon's slow pullback in yen, marks and Swiss francs tied mainly to profit taking after the units earlier stalled on the upside.

June marks, which had turned back from resistance near $0.6617 or about 1.5160 spot, nosed below support at $0.6600 or 1.52 spot and stuck there for the rest of the session.

Swiss francs accelerated losses briefly when the contract hit late sell stops in otherwise uninspired trading.

Floor brokers complained about the lack of order flow, and some saw little chance for a pickup in business this week, given the thin slate of key US economic data this week.

March US durable goods orders are forecast falling 0.3 percent and dipping 0.6 percent without defence.

They said sentiment still favours the dollar's upside against most units except the yen, where crosses and ideas that Japanese rate could head upward lent support.

"I think net-net, you're going to look for a higher dollar," said one floor broker. "Yen might stay firm, but we are going to look for a higher dollar/mark."

Futures had nudged higher and brushed day's pit-session peaks in a technically oriented move after finding little incentive from the February US trade balance figures.

The trade deficit shrank 17.1 percent to $8.19 billion against forecasts for a $8.70-billion shortfall. January's $10.27-billion gap was revised to a $9.88 billion deficit. The gap with Japan grew 2.7 percent to $3.89 billion.

The mark stayed under pressure versus the Italian lira, which rose on talk Italy might rejoin Europe's Exchange Rate Mechanism, which it left in September 1992, and on ideas that official Italian interest rates could come down.

June yen ended off $0.000002 at $0.009446, marks lost $0.0017 to $0.6596, Swiss francs fell $0.0025 to $0.8157, Sterling gained $0.0054 to $1.5164, Canadian dollar rose $0.0001 to $0.7346, Aussie dlr rose $0.0025 to $0.7870, and Mexican peso lost $0.000050 to $0.129300.-Reuter