The dollar extended gains in Asia as markets were sensitive to the hawkish undertones within yesterday's FOMC minues, though this was widely expected and there was a range of opinion. Nevertheless, this added traction to the dollar, which had already rallied amid sharp losses in gold on talk that a commodity fund was in trouble. The big risk off moves were evident in Asia and it tipped EUR-USD through key support at 1.3260-65. Cable continued to suffer from the BoE's tilt to more QE in yesterday's minutes and thin trade triggered a big stop hunt that culminated in trend lows under 1.5150. AUD also headed back to recent lows around 1.0230 by late Asia and NZD extended its correction from 0.8500 area to move into 0.8330. USD-JPY maintained recent levels in the mid-93s as broad dollar strength absorbed a sell off in the JPY crosses.

[EUR, USD]
EUR-USD headed lower after it opened on a bearish footing under 1.3300, which fueled broad dollar strength over the FOMC minutes and a general risk off tone. A EUR-JPY move from 125.00 at the Asia Pacific open to 123.65 tipped EUR-USD through support between 1.3280 and 1.3260 and stops took it to 1.3235 lows. More selling on upticks looks likely, with short term interest tipped into 1.3300. There should 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]
USD-JPY experienced choppy rangebound trade, with dollar strength absorbing yen-cross weakness. It continued to meet good offers ahead of 94.00, but there has been no significant downside progress as funds hold on to hope of more BoJ policy stimulus. The issue of BoJ Governor nomination has seen a more broadly balanced yen tone, though all the action went through the crosses today as the dollar legs experienced a meltdown due to the risk-off moves and the FOMC minutes. EUR-JPY saw most of the action, but GBP-JPY extended to 141.35 from 143.00 in early Asia and AUD-JPY slumped from 96.40 to 95.55.

[GBP, USD]
GBP plunged after BoE voted 6-3 for unchanged policy. King, Miles and Fisher voted for more quantitative easing, which fueled a deep Cable drop from 1.5440 and it extended to new trend lows just under 1.5150 in Asia. Stop losses were heavy through 1.5170 and thin trade exacerbated the downturn. Selling pressure is likely on upticks as market participants look for more stimulus, while weak economic conditions have also see more pronounced selling since the start of the year. Barriers are noted at 1.5100, which are likely be defended and more hedging activity may support for a time.

[USD, CHF]
EUR-CHF has been weighed down by EUR-USD selling pressure, leaving it just in front of 1.2300-10, where good support has been noted in recent sessions. The EUR downturn has also seen USD-CHF headed towards 0.9300 and could keep EUR-CHF stable to a degree, though the recent failure to sustain levels over 1.2350 has left an element of downside risk intra-day. A break under 1.2300 will see support at 1.2275-80 threatened.

[USD, CAD]
USD-CAD continued to climb, moving over 1.0190 to seven month highs in late Asia. Option related offers ahead of 1.0200 barriers fueled light profit taking and it edged back to 1.0170. However, risk is on the upside following yesterday's sharp sell off in commodities, which spilled into the commodity bloc currencies. The technical backdrop is also with the USD-CAD upside after it rallied out of 1.0050 last week. Bids are now noted from 1.0150-60 and then into 1.0140.