The dollar remained rangebound in Asian dealings as the market waited for fresh developments on Cyprus. Narrow ranges persisted throughout and there was very limited appetite to enter the market. Cypriot lawmakers will today begin to debate legislation that is hoped to unlock the bailout. However, the market is braced for a potential risk that it could end up leaving the eurozone if no solution is agreed. Elsewhere, Italian president Napolitano is expected to appoint a new premier today, after Grillo rejected any cooperation and Bersani failed to secure sufficient support. EUR-USD held close to 1.2900 for most of the session. JPY also held up after gaining after a disappointing first press conference from BoJ Governor Kuroda, though he did signal more easing. AUD and GBP benefited on the eurozone uncertainty, leaving the former over 1.0400 and the latter close to 1.5200.

[EUR, USD]
EUR-USD traded in a wafer thin range close to 1.2900 amid on going uncertainty over Cyprus, and after yesterday's weak eurozone manufacturing PMI data. With Cyprus far from settled, it appears the tactic of selling into upticks will continue. The lack of progress under 1.2900 is being pinned on overstretched short positions, along with reserve management flows. Short term accounts are also a bit wary of getting caught on the wrong side of the market as eurozone members in the past have tended to cobble together last ditch plans in order to receive a bailout. November-22 lows around 1.2835 are going to be key in the near-term, along with a potential close on the week under the 200-dma around 1.2875-80.

[USD, JPY]
USD-JPY extended losses under 95.00 and filled in Japanese bids to 94.75. EUR-JPY weakness weighed on Thursday as uncertainty over Cyprus' future in the eurozone fuelled yen repositioning. A soft risk backdrop also helped as specs were more comfortable buying JPY after the press conference from BoJ Governor Kuroda. Kuroda signalled more policy easing, yet fell short of the bold remarks that were anticipated and did not suggest there would be an emergency meeting ahead of the next scheduled monetary policy meeting on April 3-4. Japanese names should still buy dips in the near-term and 94.50 was defended by importers over the course the Tokyo session.

[GBP, USD]
Cable held on to levels close to the 1.5200 region after it benefited on eurozone uncertainty. EUR-GBP's move under 0.8500 kept it elevated around the 1.5190 region and it is likely to make another test of stops at late February highs around 1.5220-25, which held on Thursday. Buyers are likely on dips, with the GBP tone looking better than it has done of late after various comments against further sterling weakness from BoE Governor King and other BoE members over the last week.

[USD, CHF]
EUR-CHF is trading close to 1.2200 after it traded in lockstep with EUR-USD. The market is in a holding pattern until the issue over Cyprus is resolved. This should limit the EUR-CHF upside and sellers are expected to cap into 1.2230 and 1.2250. Movement into 1.2200 and 1.2180 has met good local account bids in recent sessions and we think these are likely to hold today. USD-CHF is stable around the 0.9450, but has had trouble sustaining another move on 0.9500, which is due to EUR-USD's stable tone around 1.2900.

[USD, CAD]
USD-CAD is firm around 1.0250 after it bounced from the 1.0200 level at Thursday's North American open. Corporate buyers reportedly swooped in near the figure and the fact that stocks have generally struggled, along with commodities has been a supportive factor. Offers are seen from 1.0250, and are said to be lined up to 1.0300, so ranges may hold up for the time being.