The dollar lost some ground in morning N.Y. dealings on Thursday, though was mostly firmer through the afternoon, as weak equities, commodities, and general risk aversion prevailed. EUR-USD started near 1.3190, and made its way to 1.3230 highs before turning lower, and making better than one-month trough under 1.3170. USD-JPY moved toward 92.75, though managed to retake the 93 handle in afternoon dealings. USD-CAD moved over the 1.0200 mark, making seven month highs, while cable held its own remaining relatively fir near 1.5250 after making trend lows under 1.5150 in Asia. The economic calendar revealed softer headline, though slightly firmer January CPI data, while the Philly Fed index miss badly to the downside, and existing home sales were about in line with forecasts. Friday's U.S. calendar is empty.

[EUR, USD]
EUR-USD was drawn to large expiries at 1.3200, which provided support, along with corporate bids at 1.3170-80. The Spanish debt auction was a mild positive, although corrective action was fairly shallow after the disappointing eurozone PMI data, which saw the composite flash eurozone PMI below expectations at 47.3. EUR-USD managed 1.3230 highs in N.Y., though the erosion on Wall Street and general abandoning of risk taking saw the pairing slowly slide under 1.3170 into the close. There should also be an element of caution ahead of tomorrow's LTRO repayment, where banks have the opportunity to repay the second of ECB's long term tender, though the results could be a bit comprised due the proximity of the weekend Italian election.

[USD, JPY]
Japanese bids supported USD-JPY at 92.75, while bargain hunting went through EUR-JPY, which fueled a move back to 93.25. Liquidation of yen-short positions exacerbated the downturn, but once stops were filled prices stabilized. EUR-JPY recovered from 122.25, where good bids were tipped and traded back to 123.00. 92.75 support held up for the dollar pairing, and USD-JPY traded back over 93.00 into the close.

[GBP, USD]
Cable is steady close to 1.5250 after it edged out intra-day highs close to 1.5270. This represents near-term resistance in the short-term following the short covering rally out of trend lows of 1.5132. Short term positioning well be well overstretched, though downside risks remain on the U.K. policy outlook despite improving economic data of late. Market sources said some U.S. corporates may be under hedged and have started to trade strikes through 1.5000 down to 1.4800. On the other side of the ledger, a leading U.K. name tipped a medium buy signal and good risk reward at current levels. 1.5200 represents the bottom of the range over the last two years and Cable also has strong exhaustion signals on the daily chart.

[USD, CHF]
EUR-CHF was weighed by eurozone risks, though Swiss trade data underscored expectations that the economy is on the mend. EUR-CHF was impacted by broader based EUR weakness, which overwhelmed the bid in USD-CHF and drove the cross from 1.2330 to 1.2270. A better than expected Swiss trade surplus highlighted not only the importance of the eurozone to Switzerland, but also U.S. and Asia, as watch exports surged in these regions. However, the cross outlook will be wholey dependent on the eurozone, which will determine SNB policy ahead. The SNB has maintained in the last two weeks that the peg is here to stay for the foreseeable future while eurozone uncertainty and deflationary forces are at play. Intra-day, EUR-CHF buyers are likely into near-term lows at 1.2275-80 and 1.2250. Movement over 1.2350 represents the top of the recent range.

[USD, CAD]
USD-CAD edged over the 1.0200 mark in London trade, though was met by good selling interest, and subsequently moved back toward 1.0175. Stops are seen at 1.0205-10, though more selling interest was touted from 1.0220-30. The recently weak commodity backdrop, and soft equity markets have weighed on the CAD, and the next USD-CAD upside target appears to be 1.0231, levels last seen on July 25 of last year. More stops can be expected over the level. Afternoon trade saw oil and stock prices slip further, which resulted in USD-CAD trading to 1.0206 highs. Some gains were given up into the close, as the pairing slipped back toward 1.0190.