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IMM currency futures end thin session mixed

CHICAGO: IMM currency futures ended a day of lackluster trade mixed Monday, as light activity combined with little new US economic data left traders without much direction.

A strong US stock market capped gains in the March euro for much of the session, traders said. News of the proposed merger of America Online Inc. and Time Warner Inc. lifted US equities and pressured IMM currency futures.

"It's really equity-driven in currencies," said one IMM currency futures trader. "It came back on the stock break. As the stocks broke, the dollar weakened."

March euros opened weaker and remained in weaker territory for the entire session. The contract recovered slightly and pierced intraday resistance at $1.03000 and $1.03080.

Shortly before the close of the pit session, European Central Bank Vice President Christian Noyer said he was "very confident" the euro would continue to appreciate.

During morning trade the ECB's chief economist Otmar Issing said he was "not concerned about the medium term." However, Issing did admit the currency's dip in 1999 may have damaged public confidence.

"For the people it mattered that the euro was on TV for many months shown with an arrow pointing down," he said.

Those statements did not deviate from recent comments by ECB officials and thus had little effect on currency contracts, said Kathy Jones, director of futures research at Prudential Securities.

"We've heard these comments before. Any impact was muted by the fact that they're sort of repetitive," Jones said.

March yen bounced in and out of negative territory during the session, paring gains after a firmer open. The market was closed in Japan for a national holiday, which kept activity light, traders said.

Unwinding of euro crosses versus the yen directed price action for much of the session, traders said.

Nearby yen set a fresh session low at $0.009582 in morning trade, breaching support at $0.009596 and $0.009585.

At settlement, March yen was up $0.000010 at $0.009606, euros off $0.00280 at $1.03040, Swiss francs off $0.0018 at $0.6421, sterling off $0.0018 at $1.6368, Canadian dollar up $0.0004 at $0.6883, Australian dollars up $0.0009 at $0.6570 and Mexican pesos up $0.000850 at $0.103700.-Reuters