The Asian session was very quiet due to a holiday in Japan for Foundation Day and several other centers were closed for the Chinese New Year. The only data of note was Australia housing finance, which came in much weaker than expected, though only had a mild influence on AUD, which maintained a tight range close to 1.0300. EUR-USD marked time under 1.3400 after it recovered from a stop hunt at the Asia Pacific open. USD-JPY was supported around 92.40-50 region, but saw limited upside after Friday's deep losses on confusing comments from Japan Finance Minister Aso, who indicated that yen weakening may have been faster than intended. As well as this week's Asia holidays, activity will also be dampened by pending event risks, which include the European finance ministers meeting, the U.S. State of the Union address by President Obama and the G20 meeting.

[EUR, USD]
EUR-USD took out stops through 1.3350 in early Asia-Pacific trade. The move was blamed on a U.S. account, though the lack of liquidity certainly exarcerbated the downturn, which resulted in 1.3325 lows. Thereafter buying interest returned as shorts covered and it extended to 1.3390 by the time early European traders entered the fray. After last week's break down the balance of risk is likely to be on the downside initially.

[USD, JPY]
USD-JPY traded in a narrow range either side of 92.50. There was tentative buying interest on dips following very large Japanese support from 92.20-30 on Friday, which stopped the sharp correction amid comments from Japan Finance Minister Aso. Market sceptics suspect Aso's comments on the pace of yen weakness may have been a ploy to avoid policy criticism at this week's G20 meeting. JPY is still expected to meet selling pressure on upticks, but into the G20 there may be more limited action. The WSJ said that G7 officials are expected to make comments in the coming days, even if they haven't agreed on a joint statement.

[GBP, USD]
GBP gave back some of Friday's gains, leaving Cable under 1.5800 and EUR-GBP supported ahead of 0.8450. The weekend press was broadly negative about the U.K. economic outlook and suggested that the BoE will downgrade the growth outlook this week when it releases its quarterly Inflation Report. This will keep alive policy easing hopes and should limit the the potential for a sustained GBP recovery.

[USD, CHF]
EUR-CHF is trading under 1.2300 as EUR-USD heaviness cut into the topside. The lack of momentum over 1.2300 in recent sessions has left downside risk and the cross could revert to levels in the 1.2250-60 region, where two-way flows were noted late last week. USD-CHF is still finding a modicum of support on dips amid dollar safety plays, but there has also been notable swissy inflows still in recent sessions as eurozone uncertainty picked up last week amid the political backdrop in Spain and Italy. It is likely to remain capped over 0.9200 as a result.

[USD, CAD]
USD-CAD has extended to 1.0050 after Friday's modest rally, which came on the back of a plunge in Canadian employment. Housing starts also dropped and the narrower trade deficit was influenced by a fall in exports. Overall, the data mix supported the BoC policy stance and with the dollar in better shape it provided the momentum for higher levels. Offers up to 1.0050 have been cleared away, leaving the focus on 1.0070-80 and 1.0100, while it appears the 1.0000 level is now interim support.