Dollar Ends Mixed As Stocks Stall in Afternoon

The dollar put in a mixed performance Thursday, gaining
against the yen but ending
little changed against the euro as stocks rallied in early trading and then
stalled in the afternoon.

Some risk-sensitive currencies, such as the U.K. pound and the Canadian dollar,
advanced against the greenback.
Thinning liquidity ahead of the May Day holiday in several key European countries
on Friday and month-end
flows complicated currency trading Thursday, resulting in a relatively
directionless session.

"It's the last trading day of the month, and there could be some month-end flows
that are driving markets
beyond the usual fundamental sphere," said Dustin Reid, director of G11 forex
strategy at RBS Greenwich
Capital Markets in Chicago.

Currency markets weren't visibly roiled by news at midday that Chrysler LLC
filed for bankruptcy protection
in a plan that would provide new ownership for the ailing auto maker. The owners
will include the U.S.
and Canadian governments, Italian car maker Fiat SpA and a health-care trust fund
for union retirees.

The Chrysler bankruptcy wasn't a major disturbance in the market in part because
it appears the company
will re-emerge in a restructured form, Reid said.

While the euro remained contained against the dollar Thursday, seesawing during
the session between gains
and losses against the greenback, the Canadian dollar continued to push higher.
"The Canadian dollar has been the big mover of the last few days," said Tyson
Wright, senior foreign exchange
trader at Custom House, a currency services firm in Victoria, British Columbia.
Technical factors rather than economic data appeared to be supporting the
Canadian currency, although
it also drew sustenance from expectations of a global economic rebound towards
2010, he said.

Late Thursday, the dollar was trading at C$1.1933, up from a session low at
C$1.1867 but below C$1.2032 late Wednesday.
The euro was at $1.3237, off from 1.3250 late Wednesday, and at Y130.48, up from
Y129.10. The dollar traded
at Y98.62, up from Y97.42 late Tuesday, according to EBS.
The dollar was at CHF1.1413, up from CHF1.1380, while sterling was at $1.4803, up
from $1.4770.

The dollar advanced against the yen as that currency's role as a safe-haven
proved detrimental to it Thursday,
when equities were in positive territory for much of the session.
The dollar reached a high of Y99.00 before ceding some of its gains, according to
EBS.

The dollar/yen pair will likely continue to trade in recent broad ranges, said
Reid, of RBS Greenwich
Capital Markets. "I think, in general, dollar/yen's going to be rangebound
between Y93.00 and Y100.00
and just continue to bounce around there," he said.

How long equity markets will be able to maintain their positive momentum, and
thus provide support for
risk-sensitive currencies, remains open to question.
"I'm not sure this is sustainable in the short term, because there is still lot
of bad news out there
and this could be more of a bear market equity rally than an actual bull market,"
said Custom House's
Wright.

Such a development would tend to curb recent strength by the euro, the Canadian
dollar and other similar currencies against the U.S dollar, he said.

The Mexican peso remained under pressure due to persistent concerns about the
swine flu outbreak, with
the U.S. dollar trading around MXN13.8035 in late trading, above MXN13.705 at
Wednesday's close.

A report from Brown Brothers Harriman in New York said the outbreak is
dramatically affecting liquidity
in the peso. "The drop of in liquidity is causing not only greater volatility,
but also a widening of
the spreads between the bids and offers," BBH said