The dollar was mostly higher in N.Y. trade on Thursday, with EUR-USD being the exception. The euro continued to be bid up after better German PMI data, and the best-in-two-years China flash manufacturing PMI. These all contributed to the moderately risk-on tone in global markets. USD-CAD was firmer on the BoC hangover from Wednesday, while USD-JPY managed to crack the 90.00 mark. Sterling was hurt by a speculative drive for barriers, which tripped Cable stops through 1.5800, and to lows under 1.5760. On the economic front, weekly U.S. jobless claims were lower than expected, while December leading indicators came in as forecast.

[EUR, USD]
EUR-USD found buyers under 1.3300 in Europe after a better than expected German manufacturing PMI. and steadied near 1.3320 into the N.Y. open. U.S name buyers took their turn, taking the pairing over 1.3350 by mid-morning. The announcement on LTRO repayment on Friday likely provided euro support, but the ramifications are a mystery for now. EUR-USD peaked over 1.3390 into the London close, and remained near the top of its trading band into the N.Y. close.

[USD, JPY]
USD-JPY steepened its bid after U.S. jobless claims to trade at 89.90, leaving it a short distance from 90.25 trend highs. Poor Japan trade data overnight added some justification for the shift to a more activist policy stance, while Japanese policy makers were vocal again amid disappointment after BoJ moved to open-ended asset purchases, but not until January 2014. Economy Minister Amari hit back at criticism of Japanese policy overnight, claiming it isn't guiding the yen lower, but rather the market is "correcting on its own" from an excessively strong yen. Other global policy makers do not agree. Japan's neighbour in the Far East are worried it may gain a competitive advantage and other leaders have also voiced concern. More than one Japanese official touted Y95-Y100 as no problem for Japan, but could become a bigger issue globally at those levels. USD-JPY option barriers feature heavily from the 90.50 area, which could slow the rise near term.

[GBP, USD]
Cable remained heavy under 1.5850. So far there has been no strong impetus to retest 1.5800 barriers. U.K. CBI distributive trades came in at 17 from 19 previously, which was better than market expectations. Cable looks weak technically, but shorts got caught by a Middle Eastern name in front of 1.5800 yesterday and this has deterred heavier selling today. Range players still sell ahead of the 200-dma around 1.5900-10 and look to unlock levels from late August around 1.5770-80.

[USD, CHF]
EUR-CHF is underpinned by long position building, which follows Wednesday's round of bargain hunting after the brief move under 1.2350. It has experienced more local name demand today from the 1.2370 area, while a better than expected German manufacturing PMI reading has carried EUR higher. EUR-CHF has had a hard time sustaining higher levels since it pulled back from the 1.2570 area. The cross is still correcting overbought levels and there are still mixed macro lead globally, which could explain the pause, though long term players are still positioned for a move back over 1.2500 towards 1.2600 and above. The success of this trade will largely depend on whether the eurozone can sustain the improved conditions seen since the start of the year. USD-CHF is supported on dips into 0.9300 and below within the narrow 0.9280-0.9350 trading band.

[USD, CAD]
USD-CAD managed early highs near 1.0025, into noted offers which started from 1.0030, and it initially pulled back to 1.0010 in early trade. Bids were seen at 1.0000-0.9990, which provided support, and the pairing rebounded later to session highs of 1.0035. Option barriers were noted at 1.0050, which will reportedly be defended until the Friday N.Y. options expiry. As a result, 1.0000-50 may define trade through the overnight session.