FX trade was fairly subdued through the Wednesday session, after Cyprus rejescted the deposit tax proposal. While the situation is not settled there, there was some caliming of nerves through the day, which allowed EUR-USD to climb back to 1.2980. Ahead of the FOMC, the dollar managed just a few wiggles, and eventually only managed a modest reaction to the Fed announcement. FOMC did not spring any surprises, leaving rates and QE intact. The statement indicated that economic growth returned to a moderate pace and longer term inflation expectations remain stable. Labor conditions have shown signs of improvement, but the unemployment remains elevated. The Fed said spesnding advanced and housing strengthened, but it added "fiscal policy has become somewhat more restrictive." The statement also edited out the phrase on global financial strains, and merely indicated it continues to see downside risks to the economic outlook.

[EUR, USD]
EUR caught a bid on Cyprus deal speculation. EUR jumped from 1.2910 to trigger stops at 1.2950 on talk Cyprus Popular Bank reached a deal with Russian investors, which will cut finance needs by EUR 4 bln, according to the Greek press. Russia was also considering a deal to access untapped natural gas fields, though Gazprom rejected earlier speculation. Cyprus later denied the Russian deal, which dented the EUR bid. It gave back half of its gains, easing back to around 1.2930. The euro jumped briefly to 1.2978 highs after the FOMC, though settle in near 1.2950 into the close.

[USD, JPY]
USD-JPY held on to better levels intra-day. Fresh yen shorts helped the dollar pairing out of 95.00 after the European open to 95.65 by early N.Y. Position building picked up since Tuesday ahead of tomorrow's first official speech from Kuroda as the new BoJ Governor. Market participants are anticipating a signal on further easing ahead of the early April meeting, which will include the outgoing Iwata and long time BoJ careerist Nakaso. Since the start of the week offers were reset towards 96.00 and from 96.30 to 96.75, where option barriers are noted. To recap, topside strikes dealt up to 98.00 to capture the BoJ meeting on April 3-4, while over a month hedging across the psychological 100 handle was noted yesterday.

[GBP, USD]
Cable was net firmer over the U.K. Budget statement, trading at highs over 1.5165. The market welcomed the cut in corporation tax by 1% to 20% in 2015. A new employment allowance will cut national insurance bills by GBP 2k for every firm and small firms will also pay no employer national insurance. Stamp duty was also axed on shares traded on growth markets like Aim. A new housing scheme was also announced, with interest-free loans up to 20% of the value of new-build properties and a bank guarantee will underpin GBP 130 bln of new mortgage lending for three years from 2014. Movement slowed ahead of the Fed policy announcement, cable just wiggled slightly after the Fed, settling in ahead of 1.5100.

[USD, CHF]
EUR-CHF is trading close to 1.2220 after it rallied in lockstep with EUR-USD, which traded back over 1.2920 amid rising expectations that Cyprus will come up with another plan in order to get a bailout. It has to find EUR 5.8 bln, but could not pass the bank deposit tax and is currently in talks with Russia to provide aid. The majority of the funds deposited at Cyprus banks is believed to be from Russian investors. EUR-CHF should see limited upside until there is more certainty over Cyprus and sellers are expected to cap into 1.2230 and 1.2250. USD-CHF has backed away from 0.9490-00 on a slightly easier dollar tone, but is still meeting tentative buyers from 0.9450 and further support is seen into 0.9420. As well as eurozone issues to contend with there is also the U.S. FOMC policy statement to digest.

[USD, CAD]
USD-CAD held into the 1.0240 level, after moving mostly sideways overnight around 1.0270. Bids wre noted from 1.0230, with offers at 1.0290-00 now. Ranges held up into the FOMC announcement this afternoon, which was ultimately pretty much a non-event. The pairing managed highs just under 1.0270 and lows of 1.0240 in light afternoon trade.