The FX market was quiet in N.Y. on Monday, with recent ranges largely holding up. The risk backdrop was fairly neutral, which provided the FX market with little directional pull. In addition, there was no data on the U.S. calendar. As a result, traded volumes were reportedly low, and trading ranges very narrow. EUR-USD managed a 1.3335-75 range, while USD-JPY held to about an 89.10-40 band. A speech from Fed chief Bernanke may cause a stir after the N.Y. close, where traders will look for some clarification of the FOMC minutes that showed a split on how long outright purchases should continue. The U.S. calendar picks up in earnest on Tuesday, and features December retail sales, December PPI, the January Empire State index, and November business inventories.

[EUR, USD]
EUR-USD washed out weak stops under 1.3340 amid another round of fund profit taking. EUR-JPY briefly traded under 119.00, but came back bid quickly on spec demand, which gave EUR a fillip. Overall, consolidation continued after limited EUR upside since EUR-USD and EUR-JPY broke 1.3400 and 120.00, respectively in Asia. N.Y. markets were a bit cautious ahead of today's speech from Bernanke due from the N.Y. close, while the earnings season also picks up this week. Option maturities that could exert an influence include close-to-market strikes at 1.3350 and there are also expiries at 1.3300.

[USD, JPY]
USD-JPY edged out session lows under 89.10 as modest equity market weakness pressurised speculative positioning. USD-JPY pulled back from 89.35 at the N.Y. open after it carved out new trend highs close to 89.65 in Asia. Japanese markets were closed today, but short term accounts keyed off positive technicals and weekend press reports that indicated an accord was likely between the government and the BoJ on a 2% inflation target. A joint statement is expected after next week's BoJ meeting. USD-JPY support is noted at 89.00 and 88.70-80, which should keep further pullbacks contained. Topside movement from here may be more choppy than some of the other levels that gave way in recent weeks due to very large 90.00 option barriers.

[GBP, USD]
Cable traded in a tight range close to 1.6050 in N.Y. The GBP upside was weighed by a good Middle Eastern account offer from 1.6170 on Friday, which encouraged fund selling, while a poor economic outlook has also fueled a fresh build up of short positions. On an intra-day basis option expiries at 1.6100 and 1.6130 provided little support, while like last week more extended movement into the 1.6050 area and below should see a build up in hedging activity.

[USD, CHF]
EUR-CHF reached new trend highs amid model fund demand after stop loss activity went through in early Asia on general euro strength and more unwinding of swissy long positions. Since last Thursday EUR-CHF has been on rise on increasing improvement in eurozone markets, along with more measures by Swiss banks to dampen CHF deposits. Friday's move above 1.2200 was a major break of range and follow through demand initially cleared away offers and stops between 1.2210 and 1.2230. During the European morning option barriers at 1.2150 were also extinguished to fuel a move on the 1.2275 region.

[USD, CAD]
USD-CAD rose to session highs near 0.9865 in early North American dealings, after finding a base near 0.9830 overnight. With a large batch of bids reported into 0.9800, shorts appeared to have taken a break, as traders noted short covering from model funds and IMM types. Option backed sellers were reportedly in place from 0.9880. The pairing later slipped under 0.9840 again, after failing to make much upside headway. London names were sellers into their close, likely cutting intra day long positions. Support is seen into 0.9830, and narrow ranges are likely to hold up near term. The BoC's Q4 (Winter) Business Outlook Survey revealed ongoing concerns over demand in the next 12 months, with the survey also reflecting a period of "softness in economic conditions." There was little market impact.