The dollar and yen consolidated in quiet trade. China manufacturing PMI was in focus and both the official reading and HSBC's release came in on the weaker side, which generally weighed on equity markets. This kept EUR under the 1.3100 level, while AUD challenged the 1.0200 region. Momentum was generally low though and for the most part the G10 FX maintained the recent range. Japanese data offered justification for the easy policy stance, with deflationary pressures still evident. However, household spending and unemployment data showed some improvement on the breakdown. In New Zealand, weak Q4 terms of trade weighed on NZD early on. Elsewhere, GBP remained steady after the Liberal Democrats won the Eastleigh by-election, which was seen as a potential threat to the coalition.

[EUR, USD]
EUR-USD found a modicum of support after it was unable to clear out bids at 1.3050. It headed back to 1.3085 on light short covering, but the underlying trend should keep bias on the downside. The near-term target remains on 1.3000 barriers and downside hedging has been prevalent as option names hedge gamma.

[USD, JPY]
USD-JPY was unable to sustain Thursday's N.Y. highs and eased into the 92.40 region versus yesterday's 92.85 peak. JPY is more balanced at current levels and with Kuroda nominated as BoJ Governor the next potential focus is how aggressive he may be to fulfill the 2% CPI pledge. Japanese data today supported the dovish policy stance, which should keep USD-JPY risk on the topside. However, March is often a difficult month to judge due to potential yen repatriation flows related to the Japanese fiscal year-end, which could absorbed good periods of yen selling.

[GBP, USD]
Cable maintained a supportive tone relatively close to the 1.5200 region. Since it broke the 1.5100 it has experienced decent periods of buying interest. Repositioning by specs has been a feature, along with increased corporate demand for sterling as current levels are attractive for repatriation and longer-term positioning. The fundamental backdrop is still poor, which has put a top in place, but overall there are signs that economic fundamentals are stabilizing.

[USD, CHF]
EUR-CHF is firmly above 1.2200 after it benefited from a USD-CHF break of range. The dollar pairing squeezed up through 0.9350 and extended just above 0.9370 on general dollar strength. It is possible that the U.S. sequester could keep the dollar supported into the weekend before risk appetite sets in again. Also weighing on the risk backdrop was disappointing China manufacturing PMI and eurozone data should also come in on the weaker side today.

[USD, CAD]
USD-CAD is supportive after it broke to new trend highs over 1.0310 late on in the North American session. The pullback in risk appetite should add traction to the move, but it is territory where both fund names and option accounts are likely to cap gains ahead. Buyers are likely into 1.0270-80 and the 1.0250 area, intra-day.