GBP remained the weak link today as the market continues to trim longs after being caught flat-footed by the BOE’s move to extend QE announced Thursday. Combined with growing hopes for several quarters of robust US growth after the US employment report surprised to the upside on Friday, the pound has been hard hit and showing little appetite for a fight at the moment. After mostly sideways action in London, the pound came under renewed pressure during the New York morning, taking out stops below 1.6600, 1.6550 and 1.6500 before finally finding a foothold at 1.6430. Rebounds were limited to 1.6475 during the afternoon.

EUR/USD followed cable but from a distance. Liquidity was much better in EUR/USD, making the move a more grinding affair than GBP/USD dips and dives. Friday’s 1.4152 lows gave way late in European trade and prices failed to recover that level for the rest of the session. We dipped as low as 1.4104 and now eye offers in the 1.4140/50 area but there are a few light stop-loss orders now above 1.4160 from day traders.

Aussie and CAD held up valiantly during the initial phases of USD strength but each eventually succumbed to long liquidation as the dollar surged versus the European pairs. AUD/USD retested overnight lows in the 0.7330 area before staging a bounce while USD/CAD pushed above the 1.09-handle briefly this afternoon to trigger stops.

USD/JPY fell back on EUR/JPY sales around midday as well as on somewhat softer US yields. The firm Japanese economic data overnight help take some of the steam out the recent JPY slump. Repatriation of US coupon payments this week was a factor as well. We dipped below the 97-level for about an hour before ending just above that mark. 96.88 was the low.