FX Trade was very quiet in N.Y. on Monday, as year-end conditions kept activity to a minimum. The U.S. fiscal cliff deadline grabbed the most attention, though at the time of this writing, there was no deal forthcoming to avoid the automatic triggering of tax hikes and spending cuts. A U.S. senator indicated early on CNBC that a deal was in the cards, which helped pare back pre-open stock losses, and supported EUR-USD, and USD-JPY. A deal will be good news for the near term, though with debt limit negotiations around the corner, and no real accomplishments seen on entitlement reform so far, the "deal" may be just another round of kicking the can down the road. Major dollar pairings were range bound through the session, and traded volumes very light.

[EUR, USD]
EUR-USD found buyers under 1.3175 early in the session, as short covering stepped in ahead of Friday's 1.3166 base. End of year trade was light, and even with the U.S. cliff looming in the headlights, subdued risk levels failed to see much follow through. Barring a last minute agreement from Washington, euro upside was limited as well, with sellers returning into the 1.3225 level. EUR-USD moved to session highs over 1.3225 as stock futures erased their losses. The equity move appeared to coincide with comments from U.S. senator Corker on CNBC, who said he thought a cliff deal would likely be forthcoming today at some point.

[USD, JPY]
USD-JPY climbed to highs over 86.45 after stocks rebounded on cliff optimism. The pairing had been steady just over 86.00 into the N.Y. open, in very light dealings. As stock climbed, the yen remained under pressure into the close, though USD-JPY was held under Friday's high of 86.64.

[GBP, USD]
Cable was supported ahead of 1.6150 largely due to the correction in EUR-GBP. Very low market participation out of London moved GBP higher on Friday and this was the case today. Cable took EUR-USD-s lead in N.Y. trade, moving higher in vaporous dealings. The pairing blew through last week's high over 1.6200, managing highs near 1.6275.

[USD, CHF]
USD-CHF is stable close to 0.9150 following last week's move up from the 0.9100 region in thin trade. Movement in USD-CHF mirrored the EUR-USD correction back to 1.3180, though direct flows via USD-CHF were limited, overall. USD-CHF sellers are layered towards 0.9200, which have held since December-16 and are protecting buy stops above. The daily chart has pointed to an extended move under 0.9100, but the lack of follow through last week has left a more neutral picture.

[USD, CAD]
USD-CAD eased toward 0.9930 in London trade, though as risk aversion rose on the back of concerns of no progress in Washington, the pairing moved up toward 0.9960 in very light trade. The pairing eased slightly on talk there could ultimately be a cliff deal. Flows were said to have been largely one-off orders, and tight ranges continued into the early close.