Despite some variable price action USD continues to strengthen on a balance. Though currencies are unlikely to be on the agenda, traders expect range trading to continue into the G-7.

EUR/USD was stronger than many expected on the day, making it easy to squeeze shorts and ignore more rates cut calls from ECB's Papademos and a negative outlook from ECB's Liikanen.   EUR/USD edged up from NY lows of 1.2833 to highs of 1.2944 before pulling back to 1.2906 in the afternoon. EUR/USD tweaked from NY lows of 1.2833 to highs of 1.2944 before pulling back to 1.2906 in the afternoon.

Opened around 90.20-30 in Tokyo, USD/JPY eased under 90.00 in response to the over 2% slide in the Nikkei but overall, USD/JPY price action stays caught in a broad 88-92 range.

A short compression emerged in both AUD/USD and NZD/USD, start coming to a stop but sellers, with the currencies reversing almost all the gains by the afternoon, quickly emerged above 0.6600 and 0.5300 respectively. Cable consolidated mostly in a range around 1.4350-1.4400.