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The dollar slipped in early N.Y. trade on Wednesday, though eventually recovered toward the upper end of its recent trading band versus most major currencies. There was nothing on the U.S. economic calendar to provide direction on Wednesday, though moderately firmer U.S. equities, and softer oil prices kept a bid under the contract through most of the session. Sentiment that the U.S. economic and interest rate outlooks remain supportive of the greenback appears to be intact, and as a result, we look for the dollar to remain in buy-the-dip mode for now.

USD/CAD clawed back its early losses, and has been steady between 1.0620 and 1.0640 since mid-morning. The decline in oil prices did the loonie no favors, though in the big picture, commodity moves have not been as highly correlated to the CAD as they were a few months ago. For now, USD/CAD appears to be finding sellers on upticks, and has generally posted a pattern of lower highs over the past two-weeks. From here, activity is liable to slow into Thursday’s release of July CPI.

The dollar remains relatively buoyant despite ongoing credit and mortgage market concerns, sluggish equities, and oil prices off their lowest levels. EUR-USD has run into steady selling around the 1.4700 mark, while USD/JPY has been unable to stray far under the 110.00 region. EUR/USD sell-stops are noted at 1.4630 now, though appear to be out of reach for Wednesday’s session. USD/JPY bids meanwhile, are said to be thick into the 109.50 region.

The greenback is carrying a strong bid tone into the afternoon session thanks largely to the downward reversal in energies, which has boosted USD despite elevated market tension surrounding the sustainability of Freddie and Fannie. The USD advance has slowed shortly into the lunch hour as it now faces several important test levels vs. other majors currencies including EUR/USD at 1.47, GBP/USD at 1.86, USD/JPY at 110 and USD/CHF at 1.10. Without the benefit of European trade this afternoon, USD is likely to linger around the aforementioned levels and should seek guidance from other markets including energies and equities.

EUR/USD found support ahead of 1.4670, and has since moved back over the 1.4700 mark in relatively light trade. Dealers reported intraday account short covering under the figure, while a U.S. investment house was on the bid, reportedly linked to EUR/JPY buying. Cross selling had weighed on the dollar pairing earlier, as EUR/JPY slipped nearly 100 points from the N.Y. open. With London gone now, EUR/USD direction from here will likely be driven to a degree by oil and equity market developments.

The dollar has rebounded broadly, as oil prices give back their earlier sharp gains, and as U.S. equities catch a bid. Earlier speculative USD selling has reversed course, as sources now report decent intraday short covering setting in. There was some decent EUR-USD buying interest ahead of the London fixing, though with that now out of the way, the pairing has slipped back from 1.4760 to near 1.4720.

EUR/USD underpinned amid talk of a London fix buy order. European interbank names are buying the dip and there has been at least two U.S. houses buying, which fueled speculation of good demand to go through at 15:00GMT. However, the upside is likely to be limited, with sovereign names capping throughout the European session from 1.4770-80.

USD/JPY consolidated adrift of 110.00 beyond the NY options cut, with a broadly softer dollar tone weighing on prices. The pair is currently trying to make upside progress, but is struggling as intraday longs favor selling interest towards the 110.00 level. Option exposure may well influence price action for the remainder of the week, with heavy expiry interest at 109.35, 109.50, 110.00 and 110.40 for Thursday and Friday’s session. The largest interest is noted from 110.00 and above tomorrow, while Friday sees a yard of 109.50 expiries. Meanwhile, the JPY crosses are relatively stable, but equally show little upside momentum as mixed equity markets limited speculative activity.

The greenback continues to fade in response to extended selling pressure in equities and flight-to-quality buying into US government paper. Uncertainty surrounding the sustainability of GSE’s Freddie and Fannie has filled the void left by the blank economic calendar and may continue to put pressure on USD going forward. The USD Index is clinging onto marginal gains at 76.887.

EUR/USD fell briefly below 1.47 late in the overnight session, but has been on a upward path ever since and is currently trading just below 1.4750. EUR/USD continues to show consolidation under 1.48 with the 9-Day moving average just above today’s range at 1.4832.

Cable, down 0.3% to 1.8612, is in the middle of its overnight range and is also showing signs of consolidation above 1.86. USD/JPY, up 0.15% to 109.87, is holding onto positive territory despite selling pressure in equities but has not been able to maintain the 110 handle after surpassing it overnight. USD/CHF is up 0.45% ti 1.097 and USD/CAD is up 0.25% to 1.0638.

EUR/USD sellers in the form of sovereign accounts reportedly returned over the 1.4750 region, taking the pairing back under 1.4740. Earlier, speculative buying was largely behind the euro’s rally, as dealers took their cue from rising oil prices, and falling U.S. equities. Next up, the 10:35 EDT EIA petroleum inventory data usually shakes up the oil market, and could provide some short term FX volatility.