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With a substantial amount of global investors away on holiday the JPY traded in a consolidated range versus the USD. Asian bourses traded slightly negative but volume appeared to be rather cautious. The JPY and USD have proven that their reputations as safe haven currencies remains intact, and going into this week the EUR centric situation is certain to be watched along with any gyrations on Wall Street.

The USD weakened against the EUR and the GBP on Thursday in markets that traded with somewhat tamer results. While Wall Street actually turned in a good day of gains across the major indexes, the currencies turned in rather subtle ranges taking into consideration the volatility witnessed the past few weeks. Of note was the rather disappointing number from the Prelim GDP of 3.0%, which missed its estimated gain of 3.5%. The weekly Unemployment Claims also were worse than feared with a figure of 460k. Today the Chicago PMI and the Consumer Sentiment reading from the University of Michigan are on the calendar. Both publications are anticipated to be near the previous outcomes. The question however is how many market participants will be around to watch the actual statistics when they are released.

The Memorial Day holiday is this coming Monday and traders may see light volume in the broad marketplace today. Having said that, the markets have produced plenty of surprises the past month and counting on anything for certain may be like wishing on the stars. The USD still finds itself within the stronger parts of its ranges versus the EUR and GBP and going into what will become a long holiday weekend for many, traders would be best advised to monitor news that can affect sentiment closely. The fact that the GDP number was weaker than expected didn’t ruffle as many feathers as might be expected when judging results on Wall Street. However after a month of negative trading the day’s gains may have been more of a natural bounce. The Chicago PMI should be monitored because both the Empire State Manufacturing Index and the Philly Fed numbers earlier this month proved sluggish. Going into the holiday weekend, traders should be ready for anything.

The USD lost plenty of ground to the EUR, GBP, and JPY on day in which the broad markets exhibited steep declines on international bourses. Wall Street and all the major American equity indexes plunged along with their global counterparts. The USD fell to the EUR and GBP and its move can be interpreted in a couple of ways. One, it could be claimed that some stability has come back into the EUR based on regulations that Germany has invoked and possible Central Bank intervention. Two, it could be said that what was witnessed on Thursday may have been short covering taking into account that short positions on the EUR versus the USD have been  predominant and that some investors may have simply been cashing in on their positions. No matter the reason for the volatility in the currency markets, equities proved that a palpable unease looms and the major bourses find themselves under a vast array of pressure going into Friday’s trading.

The weekly Unemployment Claims were released along with the Philly Fed Manufacturing Index yesterday. Both reports turned in lackluster outcomes, particularly from the Unemployment Claims which turned in a number of 471K compared to the estimate of 439K. To make matters worse investors had been expecting an improvement in jobless claims, not the slide that actually took place. Throwing oil onto an already large fire, the U.S. Senate passed a regulatory bill yesterday that seeks to throw new rules on Wall Street and financial institutions making investors an increasingly nervous bunch. Commodity prices are struggling, corporate earnings have been rather unimpressive from many sectors, and certainly the European Sovereign Debt problems have not suddenly gone away. There will be little in the way of economic data from the States today, but traders will have enough on their plates when it comes to judging risk appetite while making their decisions in what is likely to be a loud market.

Without any major economic data released from the U.K. on Thursday, the Sterling actually found itself with better footing. The GBP was able to firm like its counterpart the EUR. As to the reason why this happened, a couple of thoughts can be considered. One of the possibilities is that investors feel that the Sterling was oversold during the recent selloff which it experienced. Or two, it could very well be that what happened yesterday is short covering by investors who are cashing in on profits. The Sterling no matter the above scenarios, remains uncomfortably linked with the EUR regarding the Sovereign Debt concerns from the European continent rightly or wrongly. Today Public Sector Net Borrowing data will be published along with Preliminary Mortgage Approvals. The Mortgage numbers are expecting to see improvement and investors will follow its outcome. The GBP is likely to mirror the EUR in many respects today and traders should expect a fast paced market.

Risk adverse trading swept over Asia early on Tuesday taking many bourses lower compared to their counterparts. The JPY continued to hold its ground versus the USD, and under the existing divergent market conditions the pair appears to be under the spell of a safe haven mode as sounds of volatility break out in the background from other spheres. Gold remains strong and is trading above 1207.00 USD as some investors continue to show a taste for the precious metal.

With the onslaught continuing on many of the international bourses, the JPY and USD found its pairing well within a safe haven mode as risk sentiment continued to be poor. Gold finds itself trading at a high water mark – as it hovers near 1195.00 USD per ounce. Gold, like the equity markets, will serve as a risk barometer in the coming days. The JPY put in strong gains versus the USD on Thursday and once again is within the stronger part of its range against the greenback, which brings up the possibility traders may test its waters.

The USD gained swiftly on the EUR and GBP on Tuesday as risk aversion increased significantly in the broad markets. Bears came out in force on Wall Street and throughout international equity bourses. The down grade of Sovereign Debt in Europe impacted investors in an ugly way. Confusion has grown among investors and they are showing their sentiment by pulling riskier trades off the table.  U.S. economic data came in mixed as the SP/CS Composite 20 HPI turned negative, but an improvement in the CB Consumer Confidence reading was tendered. However yesterday’s trading was clearly affected by a volatile mix of two big stories, the ongoing testimony in Washington from Goldman Sachs executives and the EUR centric storm. Today could prove another tough ride as the Federal Reserve will release their FOMC Statement. Investors are certain to examine the paper carefully and look for any insights about long term interest rates.

The FOMC can be expected to continue their ‘party line’ that the economy remains in a fragile but improving state and interest rates will remain at their record lows for a protracted amount of time. Any deviations from this demeanor could cause a whirlwind in the currency markets. The U.S. economy has certainly showed an ability to recover from the deep recession it found itself in, but questions remain in the States regarding several important issues and it should not be forgotten that the U.S. is not out of the woods yet. Yesterday’s trading on Wall Street should serve as a reminder that there are enough bears lurking to cause rather swift declines in the equity markets. What traders will have to remain on guard for is a scenario in which a market correction could be triggered under the weight of a heavy handed government approach to the financial markets and the burden of possible contagion in the European debt crisis. The USD found many backers on Tuesday as it proved a safe haven. Today’s trading could be fast and traders will have to be proactive.

The JPY gained on the USD as risk aversion caused declines in Asian bourses. The move in the JPY and USD currency pair was not as heightened as other pairs showing that the JPY remains a magnate when a cautious avenue prevails for many investors. Gold climbed yesterday, this is significant because the USD gained widely too, and this highlights that Gold has found a large group of investors who are climbing into what is classically perceived as a safe haven as the Sovereign Debt crisis in Europe continues to manifest.

The song remained the same on Thursday for the USD and major currencies. The greenback continued its gains versus the troubled EUR but traded largely in range against the GBP and JPY. Wall Street started off the day on a downward swing as negative sentiment possibly hit the equities on the notion that President Obama would deliver a tough love message in New York.  As the day progressed Wall Street did establish some footing, perhaps calming investors. The developing news across the ocean regarding the Greek debt situation would not have made economic ‘bulls’ happy either. Optimists were then hit by a rather unimpressive Unemployment Claims number which came out worse than estimated. One bright spot emerged for the broad marketplace as Existing Home Sales did beat expectations. The U.S. will release Durable Goods and New Home Sales statistics today and these outcomes could cause a stir. Battered and bruised may have been a common feeling among some traders.

The crux of the matter in the currency markets today may be sentiment that is being generated from Europe. The USD has gained significantly against the EUR this week as it has continued to put pressure on the single currency. Traders should be well aware by now though, that divergent markets do exists and the greenback has not made the same strides against other currencies. In fact the USD has struggled versus other currencies in many aspects including the CAD and AUD as of late. Interestingly enough the broad commodity market showed demand yesterday for core products like Crude Oil and Grains, this while Gold was unable to climb. Thus we are left with the prospects that the market is turning on some rather strong impetus which is leaving traditional barometers in the dust. The USD continues to show that it is strong against the EUR and this has been the case for several months. But in the short term the greenback has shown some weakness among other currencies. Opportunities abound for traders with the stomach to enter the waters, but stormy tides must be paid heed. Caution is likely to be the battle cry going into the weekend.

The USD lost ground to the EUR and GBP on Wednesday as rather unimpressive data was published in the States. The ADP Non Farm Employment Change provided a negative surprise when it reported a minus -23K compared to the expected gain of 40K. Also the Chicago PMI reading disappointed investors with an outcome of 58.8, which was below the estimate of 61.5. Factory Orders did beat the forecast but only slightly. Wall Street did not react well to the outcomes and traded lower. Today weekly Unemployment Claims are on the schedule and anticipated to have a number of 440K. Also the ISM Manufacturing PMI is due and a reading of 57.0 is projected. Tomorrow’s Non Farm Employment Change numbers, which is predicted to show a net gain of jobs, will be on all investors minds today. However, traders must remember that the day will see rather awkward liquidity and this could make for a tough trading environment on Friday.

With the Good Friday holiday coming up, most international markets will be closed tomorrow. The New York Stock Exchange will be shuttered on Friday and currency traders will have to position themselves today with the knowledge that if they plan on carrying traders overnight and into Friday that they may face divergent moves. The jobless situation in the U.S. remains a critical lynchpin for investor sentiment and yesterday’s ADP outcome will not cheer anyone. The manner in which the U.S. added jobs (if this actually comes to pass tomorrow) will be looked over carefully. The question is whether the job creation is coming from sustainable employment in the private sector or temporary work via the U.S. government – for example census jobs which will be lost after the task is completed. The USD has enjoyed a strong trend versus the EUR and GBP for several months even though it has lost some ground the past few days. Going into today’s last full day of international trading before the holiday, not only will investors have to ask themselves if this is merely a short term correction providing a counter balance, but they will also have to take into consideration the unknown that lurks with tomorrow’s jobless report.