The dollar meandered along in N.Y. trade on Wednesday, ending about where it started, and inside of narrow trading ranges. The slate of U.S. economic releases had very little impact on prices, while Wall Street was confined to a relatively narrow trading range, offering no FX directional clues. Core December CPI came in a touch cooler than forecasts, while industrial production was in line with expectations. The January housing market index was unchanged. EUR-USD ranged between 1.3255 and 1.3310, while USD-JPY edged higher toward 88.65 from 87.95. Housing data, jobless claims, and the Philly Fed index highlight Thursday's releases.

[EUR, USD]
The dollar bid steepened after the N.Y. open amid leverage account demand out of London via EUR and GBP. U.S. interbank also joined the fray, with price action exacerbated by risk aversion and talk of ECB fix related activity. EUR-USD based near 1.3260 however, and turned higher through the remainder of the morning, peaking at 1.3310. A modest rebound in equities helped the euro, though with speculative accounts in range trade mode, short covering was a factor under 1.3300.

[USD, JPY]
USD-JPY extended its rebound to just shy of 88.65 after heavy bargain hunting went through after overnight yen strength. Japanese importers put a floor in place, but it was offshore funds that did the heavy lifting in the dollar pairing back up to 88.30 ahead of the N.Y. open and then macro names emerged from 88.00 out of N.Y. to take it to intra-day highs. A close above the Tenkan line at 88.25 would negate the impulsive sell off in Asia and reinforce the dip buying mentality. That said, we think JPY is more likely to remain broadly balanced in the latter part of the week as the focus shifts towards next week's BoJ meeting, where asset purchases and the new inflation target will take center stage.

[GBP, USD]
Cable threatened 1.6000 amid European account selling as the U.K. AAA rating came into focus after Fitch said it is hanging by a thread. The remarks aren't considered to be a new development, but added traction to sterling macro sellers. A U.K. clearer was very active in Cable from 1.6020 and successfully extinguished 1.5990 barriers in N.Y. trade. The pairing ran into sellers on moves over 1.6000, though losses were eventually limited to 1.5980.

[USD, CHF]
EUR-CHF met its first meaningful bout of selling overnight after it briefly breached 1.2400 during Tuesday's N.Y. session. It traded at 1.2414 highs, where large European names emerged, along with a prime U.S. name on behalf of a macro fund. It continued to meet offers around 1.2400 in Asia and extended from 1.2380 to 1.2335 since the European session got underway, which came in tandem with the 2.9% y/y rise in Swiss November retail sales. Buyers are noted into 1.2330 and 1.2300 as longs still target an eventual test of 1.2500 options triggers. N.Y. dealings saw the cross move back over 1.2400, though follow through was again thwarted.

[USD, CAD]
USD-CAD moved back toward the top of its weekly band, edging up over 0.9875 from overnight lows near 0.9830. Range trade remained firmly ensconced however, Dealers reported offers still in place from 0.9880 to 0.9900, which has been the case for quite some time, though the risk backdrop will bear watching going forward, with some suggesting offers may be pulled should stocks roll over lower. Equities recovered some on Wednesday however, taking pressure off the upside.