The dollar eased some in N.Y. trade on Monday, with EUR-USD aided by better German ZEW data, and by generally improved risk taking levels. The euro opened near 1.3340, and made its way to 1.3390 in light afternoon trade. USD-JPY meanwhile was supported into 93.50 until later in the session, when intra day selling took the pairing to lows of 93.30. USD-CAD rallied in a moderate short squeeze after failing last week to move below 1.0050. The only U.S. data release was the NAHB housing market index, which was softer than expected. Things pick up on Wednesday with January PPI and housing starts.

[EUR, USD]
EUR-USD maintained tight ranges for the second consecutive session. Early sell-interest met good standing bids into 1.3330, which encouraged a small move higher. Dip buyers gained encouragement after a better than expected German ZEW outcome, but the topside held as good offers from 1.3380 capped ahead of buy stops through 1.3400. Flows have been disappointing so far. A Middle Eastern account had some EUR-JPY to sell early on, which influenced the early move lower, but model funds have largely absorbed all of these flows. A light U.S. calendar today could see more rangebound action until Wednesday. In Europe, there is inflation data to digest, which may be a bigger market mover now after Draghi's comments on price stability and EUR appreciation. In the U.S., the FOMC minutes are due. Option strikes include outstanding 1.3350 and 1.3400 maturities.

[USD, JPY]
EUR-JPY demand aided USD-JPY. The cross picked up from 124.75 and squeezed out a few weak shorts through 125.00, which gave USD-JPY a lift towards European morning highs just over 93.65. Since USD-JPY broke down in Asia good offshore account offers in size have been placed at 93.70 to 93.90, while Japanese players left sell orders over 94.00. Market participants are more cautious on USD-JPY after Japan FinMin Aso appeared to back away from taking more radical measures like foreign bond buying overnight. PM Abe and Aso are also known to be in conflict on the Japan policy path and that includes the choice of BoJ Governor.

[GBP, USD]
Cable touched new lows of 1.5415, as U.K. downgrade talk kept the pound weighed down. Tentative bids returned in front of the 1.5400 level, and thinned trade has allowed GBP-USD to rebound back over 1.5435. Fresh offers are seen from 1.5450, so gains could be limited. A move decisively over 1.5600 will be needed to start flushing out some shorts.

[USD, CHF]
EUR-CHF firmed up a touch from 1.2320 back over 1.2330. The swissy experienced light selling amid speculation that the SNB could make an announcement, with SNB Jordan due to speak at 17.15GMT. The talk is unsubstantiated though and Jordan was always due to speak on the higher franc and the current account. SNB's Jordan on the wires saying the Bank will enforce the EUR-CHF floor (1.2000) with the "utmost determination", adding the SNB's FX policy is focused on ensuring prices stability. He said the Bank's current policies are accepted by the IMF, and by global central banks. EUR-CHF popped from 1.2340 to over 1.2355, though there was nothing terribly new in the comments.

[USD, CAD]
USD-CAD added to Monday's gains, rallying over 1.0135, levels last seen in late July. The 1.0050 level held up last week in the face of what was thought to have been selling related to the Nexen/CNOOC deal. There has been some talk a good portion of the deal will be funded through existing Canadian investments however, which has perhaps resulted in some decent short covering. The rally had little in the way of resistance on Monday, when both Canada and the U.S. were absent from the market, and higher levels prompted more buying this morning.