The dollar was mostly higher in N.Y. trade on Tuesday, with problems in Cyprus continuing to weigh on the euro, equities, and risk taking levels in general. EUR-USD peaked near 1.2960 early on, and ended up posting new trend lows near 1.2845 in afternoon dealings. The yen was supported by the lack of risk taking, resulting in USD-JPY slipping under 94.75. Sterling held up fairly well, as shorts continue to buy into dips. USD-CHF stopped just shy of 0.9500, while the dollar bloc stumbled. On the data front, U.S. February housing starts were slightly better than expected, though had little lasting impact on the dollar.

[EUR, USD]
EUR-USD continued to fade in rather light afternoon trade, easing to just shy of 1.2845. Cyprus woes of course, were the driving factors, though the generally soft risk backdrop supported the dollar elsewhere as well. The pairing's move under December lows of 1.2877 will keep the door open for further losses, and the next big target will be November's base at 1.2615. This said, short covering stepped in late, taking the euro briefly over 1.2890. Cyprus Parliament rejected the tax on bank deposits as a condition of the international bailout, according to headlines, which initially was taken as good news by the euro, stocks and Tsy yields, which all bounced from lows, but the bad news is that still leaves the bailout in question for the country overall.

[USD, JPY]
USD-JPY expiries should limit ranges overnight. A huge 95.20 vanilla strike is rolling off on Wednesday and is reportedly part of a hedge against a large European digital expiry, which will pay out at 95.20 or above at the N.Y. cut. Tomorrow is also new BoJ Governor Kuroda's first day in charge and there is still vague speculation that BoJ could call an emergency meeting ahead of the scheduled April 3-4 monetary policy meeting. Officials played down speculation last week and the new look board is still tipped to ease policy in April. USD-JPY eased under 94.75 in N.Y. trade, largely as risk appetite faded, though managed a rebound over 95.10 into the close.

[GBP, USD]
Cable edged out highs around 1.5145 and then drifted lower after good offers at 1.5150 encouraged selling pressure from range players. Today's 1.5100 option expiries have also fueled light selling in a low volume session, but they are not having the same influence as Monday, where very large maturities rolled off. The dollar is a bit easier, with U.S. futures pointing to higher levels, but sideways action should continue in the FX market until there is more news on Cyprus. GBP traders may also be a bit reluctant to add positions ahead of tomorrow's BoE minutes and U.K. Budget. Since BoE Governor King talked up sterling last week Cable has found good support from 1.5075, but movement over 1.5150 is still seen as a selling opportunity.

[USD, CHF]
EUR-CHF eased back under 1.2180 after it posted a decent rebound on Monday. However, there is evidence that safe haven swissy inflows have dropped off as concerns over eurozone contagion abated after the Eurogroup reaffirmed its commitment to the guarantee on deposits up to EUR 100k. As well as EUR-CHF falling, USD-CHF moved higher, to just in front of 0.9490.

[USD, CAD]
USD-CAD moved higher in the aftermath of the mixed Canadian manufacturing data, edging up to 1.0255 from 1.0225. The subsequent sell-off in risk appetite kept the pairing firm through the session, as the pairing eventually touched highs just under 1.0280. Offers were noted from 1.0280 to 1.0300, while stops are seen above.