Comments from various officials into the G20 meeting in Russia saw some choppy action via JPY, but overall recent ranges prevailed. Only GBP broke the recent trading range after a very weak retail sales reading triggered a Cable drop from 1.5520 to new trend lows of 1.5462, where option bids underpinned. USD-JPY traded between 92.20 and 92.75 for the most part as G20 risk limited action to more modest intra-day flows. There was also more caution due to reports that PM Abe and Finance Minister Aso may disagree over the next BoJ Governor. Meanwhile, EUR-USD continued to meet selling pressure on upticks. It came under decent selling pressure after good order flow went through EUR-JPY and EUR-GBP, which saw it test support at 1.3310. There is also a lot of data to digest today out of the U.S., with the N.Y. index, TIC flows, production data and consumer sentiment expected. In Canada, December manufacturing shipments are due.

[EUR, USD]
EUR-USD fell sharply after eurozone GDP releases were broadly weaker than expected. It fell immediately from the European open from 1.3440 through 1.3400 and saw stops triggered through 1.3350 to print lows just under 1.3320. The downturn was exacerbated by recent longs throwing in the towel, while specific flows included heavy sell-interest via EUR-GBP by a U.K. clearer and Japanese retail type names via EUR-JPY. This action had largely run its course by the time N.Y. trade got under way, as EUR-USD stuck to about a 20 point range over 1.3325, Interest was definitely lacking though the session, perhaps ahead of a long weekend in North America, and the upcoming G20 meeting.

[USD, JPY]
USD-JPY is senstive to G20 policy rhetoric. It backed up in early Europe amid a reduction in speculative positioning, which fueled a move into 92.20 from 92.75 after the European open, but has steadied ahead of 92.50. U.S. Treasury official Brainard said countries need to refrain from competitive devaluation, while Australian Treasurer Swan said insofar as Japan is using fiscal and monetary policy for domestic use, this is appropriate. Overnight, there was speculation over the new BoJ Governor. According to reports Abe and Aso have clashed over who will take the role. Former deputy Governor Muto has emerged as a leading candidate, but he has reservations over the scope of monetary policy and may not be a good pick for Abe's plans for policy.

[GBP, USD]
GBP plunged after a very weak U.K. retail sales reading. Cable dropped from 1.5520 to new trend lows under 1.5570 and EUR-GBP rebounded from 0.8580 over 0.8615. GBP was supported early on in the session after heavy U.K. clearer sell interest went through EUR-GBP for the second consecutive session. Cable traded up to 1.5550 on the back of these cross flows, but has generally struggled to sustain higher levels due to bearish fundamentals. A leading U.S. name has forecast Cable at 1.5200 within six weeks and this is now looking more likely. GBP fell sharply earlier in the week after the BoE Inflation Report forecast a slow recovery, yet also elevated inflationary pressures.

[USD, CHF]
CHF was mixed. It lost ground against the USD and posted modest gains versus the EUR. Price action has mainly been influenced by repositioning out of the EUR, which forced EUR-CHF back under 1.2300, where real money bids supported on Thursday. Against this backdrop, USD-CHF headed up from the 0.9200 region and briefly cleared 0.9230. However, it has struggled to clear offers that lie ahead of 0.9250 and where another batch of buy stops are noted. Directional bias for the CHF looks as if it will be dependent on whether EUR-USD manages to hold on to 1.3300 into the weekend. Technical indicators suggest that EUR-USD may be vulnerable to more downside pressure.

[USD, CAD]
USD-CAD maintained about a 20 point range of 1.0005 and 1.0025 since Wednesday's close, with strong bidding interest still noted into the parity mark. Stops are seen underneath, while offers from 1.0070-80, have reportedly been lowered to 1.0040. The closing of the Nexen/CNOOC deal later this month continues to keep the upside in check, and selling on minor upticks remains the strategy of choice. The pairing moved back over 1.0020, after testing and failing to break under parity. Good bids were parked at the figure, and resulted in some short covering action. Narrow ranges are likely to prevail however, as sellers are seen in place from 1.0040.