20000225IMM currency futures end mostly lower

CHICAGO: IMM currency futures ended mostly weaker, with some contracts coming under slight pressure from a US stock market that shook off Federal Reserve Chairman Alan Greenspan's Humphrey-Hawkins testimony Wednesday.

In the second leg of his semi-annual address to Congress on monetary policy, the Fed chairman did not take the market by surprise, traders said.

Greenspan's statement that he was "not making judgments as to whether the wealth effect is overdone or not" supported stock index futures, traders said.

While rallying US stocks capped the March euro's gains, equity strength supported nearby Canadian dollars, said one analyst at a large brokerage firm. The contract staged a slight comeback into positive territory late in the session.

March euro opened firmer and soon slipped. One fund sold about 1,500 contracts early, traders said, but the nearby euro did not hit its daily low of $1.00230 until later in the session.

"It didn't take any heat on it," said one IMM currency futures trader of large sale of March euros.

In its descent, March euros breached support at $1.00500, $1.00370 and $1.00240 before paring losses.

The nearby euro slipped on pressure that surfaced after a sharp rally Wednesday, but the analyst said the day's weakness will likely be short-lived for the oversold euro.

"It had such a huge appreciation yesterday, it's not surprising to see some profit-taking coming into the market. (That is) profit-taking on a day-to-day basis," she said.

March yen also spent the session in weaker territory, breaching intraday support at $0.009015. Further support at $0.009000 held throughout the session.

"They tried to rally it and it couldn't hold a rally," the IMM currency futures trader said of attempts to push the March yen higher in late morning trade.

The Bank of England's Monetary Policy Committee minutes from its February meeting revealed that the committee discussed intervention to weaken sterling, a factor that pressured March sterling overnight and into the pit session, traders said.

At settlement, March yen was off $0.000050 at $0.009011, euros off $0.00220 at $1.00410, Swiss francs off $0.0028 at $0.6235, sterling off $0.0092 at $1.6028, Canadian dollars up $0.0007 at $0.6843, Australian dollars off $0.0040 at $0.6209 and Mexican pesos up $0.000675 at $0.105925. -Reuters