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IMM currencies

depict lower trend

CHICAGO: Most IMM currency futures ended lower on Wednesday with September yen and pounds setting contract lows.

September yen hit its contract low overnight when the US dollar rallied up to 99 yen in the cash market.

September pounds slid to its contract low in sympathy with heavy selling in December, traders said. December pounds also set a contract low.

A large US firm sold a total of about 3,000 December pounds, starting with 1,000 sales within the first half hour of activity, traders said. The same firm emerged again late in the day as a seller, they said.

At the same time in the afternoon, a large privately held US firm bought 10,000 September pound $1.54/$1.58 strangles, traders said. Locals taking the other side of the trade had to turnaround and hedge in futures, they said.

September yen extended Tuesday's sharp losses but was off session lows made earlier in the day during a fast market drop. Some traders attributed the fast market tumble to a large cash market order. They said dealers were the main sellers of the futures during the decline.

September marks and Swiss francs were choppy after each reached the lowest level since about mid-February overnight.

In the afternoon, locals and dealers were the featured sellers of September marks and Swiss francs, traders said.

On daily bar charts, September marks have not yet fallen enough to finish filling a gap left from the Feb 16 low of $0.6733 and the Feb 15 high of $0.6650.

September Canadian dollars drifted higher after thin, choppy trade during the morning. Technicians still expected more downside for the unit in coming session.

September Australian dollars weakened with a large, privately held US firm selling 250 contracts just before the close, traders said.

September Australian dollars hit the lowest level since July 18. Traders said the unit has been depressed by overwhelming US dollar strength.

In options, traders speculated that the pound strangles were done to get out of a position.

Yen options were dominated by heavy interest in December $0.010000 puts, traders said. They said various US firms were on both sides of the market.

At-the-money implied options volatilities were mixed. September marks eased to 14.5 percent, Swiss francs to 15.6 percent and Canadian dollars to 6.2 percent.

September yen volatility rose to 17 percent and pounds to 9.9 percent. September French francs steadied at 12.0 percent.

A strong rise in US July home starts had little impact on prices. On Thursday, US weekly jobless, June trade and the August Philadelphia Federal Reserve index are due. A Reuter survey predicts claims up at 340,000, trade to show a smaller $10.7 bln deficit, and the Philly Fed index up at-12.46.

September marks ended down $0.0005 at $0.67770, yen down $0.000095 at $0.010269, pounds down $0.0108 at $1.5400, Swiss francs up $0.0003 at $0.8147, Canadian dollars up $0.0006 at $0.7355, and Australian dollars down $0.0043 at $0.7317.-Reuter