The dollar traded modestly higher through the morning session, as risk appetite pulled back some. The data calendar was busy, and generally releases beat expectations. Q3 GDP was revised up to 3.1% from 2.7%, while initial jobless claims were higher then forecasts. The Philly Fed index headline moved sharply higher, while existing home sales beat the street. The data were modestly supportive of the dollar. After peaking shy of 1.3300, EUR-USD slipped back toward 1.3220 into the London close, while USD-JPY ran out of steam at 84.45, after opening near 84.10.

[EUR, USD]
EUR-USD moved back towards 1.3300 after fund demand went through late on in the European morning as risk appetite stabilised in Europe. Option strikes between 1.3250 and 1.3300 encouraged higher levels early on, which was backed up by positive short term technical studies. EUR-USD again failed to breach or hold 1.3300 though resulting in a fairly sharp round of position squaring. The pairing moved back under 1.3220 into the London close. Dealers reported good buying interest into 1.3200, with sovereign bids noted. Stops will be a factor at 1.3180, though appear to be safe for the time being.

[USD, JPY]
USD-JPY gains stalled just over 84.40, reportedly where Japanese banks are holding modest size orders. USD-JPY overcame post-BoJ profit taking and headed back towards yesterday's highs around 84.60. However, there are still excessive yen short positions in the market and as trading drops off into the Xmas holiday more repositioning may go through. Note, tomorrow sees large 85.00 triggers/vanilla strikes roll-off, where there was significant hedging that went through earlier in the week.

[GBP, USD]
Cable is supported on dips, leaving it close to 1.6270 after a muted impact from below expectations retail sales. However, the ONS said household goods sales showed the strongest monthly rise since February 2010 due to tablet computer sales. Cable met buyers from 1.6250 since late Asia after bargain hunting went through, but EUR-GBP is a touch firmer around 0.8135 following the release. Cable may see limited upward momentum from here after risk appetite stalled yesterday on the U.S. fiscal cliff impasse and failure to take out 2012 highs at 1.6310. Under 1.6250 there are further bids at 1.6220 and 1.6200.

[USD, CHF]
USD-CHF edged back towards 0.9125 after it ran into light selling pressure into 0.9150 in late Asia. Overall, movement is slow after yesterday's rebound from 0.9090 to over 0.9150 as dollar shorts covered on risk aversion. Sentiment in Europe is relatively stable, leaving the technical backdrop to influence. There are offers at 0.9160-70 and on the approach of 0.9200, but the recent break lower points to a test of early May lows around 0.9050 and then the 0.9000 area from late April. EUR-CHF chopped between 1.2075 and 1.2085 since the European open. The downturn in EUR-USD on Wednesday forced the cross from 1.2100, yet still well within the familar range. The above expectations Swiss trade surplus justified SNB's continued policy stance, but it did not really impact the FX market.

[USD, CAD]
USD-CAD traded a 0.9870-95 range through the North American session, in very quiet trade. The rebound from 0.9830-35 this week should see range players sell towards 0.9900 ahead of resistance from 0.9910 to 0.9935. Buyers are likely from 0.9850 to 0.9830, which are protecting good size sell stops through 0.9825.