JPY experienced more price chop overnight, which influenced broader FX market moves. Movement was influenced mainly by specs and intra-day accounts, but larger interest was more contained ahead of next week's BoJ meeting. EUR-USD continued to find support on dips amid macro fund demand, which was also evident via EUR-JPY and kept it within a short distance of 1.3300. AUD-USD was weighed after a rise in Australia unemployment reinforced expectations that the RBA will cut rates in February, leaving it close to 1.0500 by late Asia. Stock markets were mostly lower after Wednesday's defensive session on growth concerns, and ahead of tomorrow's China GDP release.

[EUR, USD]
EUR-USD is still contained to relatively tight ranges close to the 1.3300 level after yesterday's failure to take out 1.3250 support. Macro demand and short term range players have been buying dips since ECB officials played down the importance of FX levels currently, but recent comments from Juncker do highlight the unease over recent EUR appreciation at a time when other policy makers are using exchange rates as a policy option. A break of 1.3250 would see an acceleration to the downside due to stop losses, while over 1.3300 offers are steady from the 1.3330 region and from 1.3370 to the near-term pivot point at 1.3400.

[USD, JPY]
JPY weakened in early trade on speculative flows, along with Japanese importer demand in USD-JPY from 88.30 to the 88.10 region. It posted a high of 88.80, but struggled to sustain upward momentum on residual Japanese offers and profit take orders as stocks struggled. EUR-JPY saw good demand from 117.30 early on and then the 117.00 area from fund names with a macro influence that kept it relatively close to 118.00. Both GBP-JPY and AUD-JPY also experienced similar interest keeping the former close to 142.00, but Aussie struggled over 93.00 due to domestic data. We think JPY will still meet selling pressure on dips ahead of next week's BoJ meet, but the market is looking more broadly balanced and a break of range may become increasingly unlikely into the weekend.

[GBP, USD]
Cable is still struggling to sustain higher levels after Wednesday's break under 1.6000. Two way flows have emerged though between 1.6000 and 1.5980, with corporate buyers and residual reserve management flows absorbing short term supply and macro account interest. However, risk is now firmly skewed to the downside with technical funds targeting an eventual test of the 200-dma close to 1.5900.

[USD, CHF]
EUR-CHF has retested levels over 1.2400, but has met persistent selling pressure from option accounts and macro funds. On the downside, short term buyers are noted into 1.2370 and 1.2350 after good support emerged from 1.2335 on Wednesday. Longs still target a push on 1.2500 eventually, but price action suggests that it may be a choppy road higher due to large orders, which are related to long standing option structures.

[USD, CAD]
USD-CAD moved back toward the top of its weekly band, edging up over 0.9875 on Wednesday after bottoming out 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. On the downside good support is noted at 0.9815 and 0.9800, as well as the short term interest at 0.9830.