Another mixed day in the FX markets, with the early tone set by the Doha talks failing to reach an agreement on production levels. USD/CAD gapped up to 1.2950 in Asia, but after London tested 1.3000 (unsuccessfully), we saw a choppy retrace back below 1.2850 with the pair still threatening a test on the low 1.2800s. A resilient tone in WTI crude / Brent crude added confidence in the equity markets, and after the futures market suggested some modest losses, the cash markets were soon back in the green and challenging the highs again. This gave spot and cross JPY a firm bid through most of the day, but notable selling of US Treasuries gave USD/JPY a boost from the low 108.00s, with a return through 109.00 on the cards again. Late Asia and early London both tested under 108.00, but found strong buying interest once again.
AUD and NZD were both looking well bid on dips through the day, though a choppy ride was seen in the latter in Asia. AUD has marginally extended the highs from last week, but looks set to test larger offers at .7750. NZD/USD still has eyes on the recent .6966/67 highs, but will face another stern challenge ahead of .7000. Cable joined in on the late USD sell off, which saw the dollar index taking out the Friday lows. GBP took out 1.4250, but we are still 1 cent off the highs seen early last week. EUR/USD is also higher, taking out 1.1300, but looks far from convincing. ECB later in the week is likely holding back more USD based moves here.