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IMM currency futures

end short session mixed

CHICAGO: IMM currency futures finished an abbreviated trading session mixed as traders considered the possibility that US interest rates might not fall further.

Closing trade was light after the initial slippage and subsequent firming after US jobs data slammed US Treasury bond futures to steep losses.

March non-farm payrolls rose 140,000, above forecasts for a 60,000 gain. The jobless rate stuck at 5.6 percent, as expected.

February's original 705,000 surge in nonfarm payrolls was revised downward to a 624,000 gain.

Traders said they were impressed, however, by the dollar's ability to shake off pressure from falling T-bond prices, which helped limit any recovery in currencies.

"They (currency traders) like the fact that the dollar didn't fall apart with the bonds," said one floor broker. "The dollar seems to be in pretty good shape."

Although rising US interest rates theoretically should make the dollar more attractive to yield-seeking investors, that textbook relationship has shifted at least for the nearterm as US T-bond prices have rallied and drawn overseas buyers, who need dollars to purchase the credit instruments.

Traders also noted market talk that Japanese interests were ready to buy dollars on pullbacks below the 107.00 level.

One floor broker said Japan's Nikkei stock average hit a record overnight and added that Japan's stock market was buoyed partly by easing of worries that Japanese rates might continue rising and buoy yen.

"I maintain that the last thing Japan wants is a stronger yen," the floor broker said. "So you buy dollars on dips."

Traders also waited to see how US stocks and bonds perform next week, with US Treasury two-and five-year notes slated for auction early next week.

At the end of pit trading, June yen fell $0.00048 to $0.009387, marks eased $0.0009 to $0.6774, Swiss francs fell $0.0015 to $0.8426, Sterling firmed $0.0002 to $1.5296, Canadian dollar edged up $0.0004 to $0.7374, the Australian dollar rose $0.0014 to $0.7807, and the Mexican peso ended unchanged at $0.124700.-Reuter