The British Pound failed to hold ground during the overnight trade and weakened against the greenback for the fifth day to reach a low of 1.5566, and the currency is likely to face increased volatility over the next 24 hours of trading as the Bank of England is scheduled to release its quarterly inflation report tomorrow at 13:30 GMT.

Talking Points
• Japanese Yen: Down Across the Board
• Pound: Trade Deficit Widens as Imports Jump
• Euro: President Trichet...

US Dollar Extends its Run but How Long will Risk Aversion Hold?
Euro on the Ropes as Greece Debt Crisis Grows Contagious
Japanese Yen to Decline if Risk Recovery Lifts Carry Trades
British Pound May Remain Under Pressure As Yield Outlook Diminishes
Swiss Franc Forecast Dims on Persistent SNB Intervention
Canadian Dollar Maintains Channel Formation, May Test 200-Day SMA
Australian Dollar to Rebound if Stock Markets Correct Higher
New Zealand Dollar...

It is difficult to forecast where the markets will be in a month or three months when volatility is as high as it is today. However, when measuring the quality of a trend; it is imperative to gauge the fundamentals that will carry the US dollar that far out to better ascertain the stability and duration of the incredible rally that the benchmark currency has carved out since the second half of January.

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FXCM Speculative Sentiment Index (SSI) Statistics:









Intraday...

The US Dollar is likely to rise against most major currencies in 2010 according to a "smiling" model of the greenback’s performance at the beginning, middle and conclusion of major recessions in the United States.

The ‘Dollar Smile’ Hypothesis

Intuitively, one would suppose that the US Dollar should decline if the United States falls into a deep recession as the Federal Reserve cuts interest rates to stimulate economic growth, making the greenback unattractive...