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ICE says canceled some trades in U.S. dollar index

Published 11/03/2009, 03:30 PM
Updated 11/03/2009, 03:33 PM

By Wanfeng Zhou

NEW YORK, Nov 3 (Reuters) - The IntercontinentalExchange said it had canceled some trades in the U.S. dollar index that roiled the market early on Tuesday.

The ICE Futures U.S. dollar index <.DXY>, which tracks the greenback's value against a basket of six other major currencies, jumped to a one-month high early Tuesday as concerns about the global banking sector ignited safe-haven demand for the greenback.

At one point, the dollar index rose to 76.817.

At 3.30 p.m. in New York (2030 GMT) it was up 0.08 percent at 76.349.

But trader talk was focused on odd movements in the dollar index early in the session. Linn Group, a Chicago-based clearing services firm, said in a research note Tuesday morning that "there was an error in the $US index that rallied the market sharply at 4:55 a.m." Chicago time (10:55 GMT).

"We sent out a notice to participants on the exchange that we were canceling trades earlier this morning," Sarah Stashak, director of investor and public relations at ICE, told Reuters.

"The exchange has taken action in accordance with its rules," she said.

Stashak declined to provide any specific information related to these canceled trades, such as the size, price level, or who might be behind the trades.

Linn Group's early market note says the exchange "busted" trades at higher levels, which it said was "over 77.50."

Disappointing results from UBS and a shake-up of UK banks Lloyds and Royal Bank of Scotland prompted investors to cut back on risky trades.

A five-minute chart showed the dollar index jumped sharply between about 3:20 a.m. and 5:00 a.m. Chicago time in response to the poor results from banks. (Editing by James Dalgleish)

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