After the start of the session today, major currencies have been trading narrowly against the U.S. dollar as markets are still waiting the Spanish budget announcement and the Minutes of the FOMC last meeting; where with the lack of major fundamentals from Europe, markets are still slightly positive over the significant improvement in the Chinese services sector.

The euro advanced slightly against the U.S. dollar today, where after the opening the common currency recorded gains against the low yielding currencies as investors' appetite for risk started to gradually improve on expectations Spain will pass the new budget with cuts worth around 27 billion euros that aims to reduce the deficit this year after missing targets in 2011.

The question to be asked here is how Spanish lawmakers will be able to balance between boosting growth and controlling the deficit, noting that the economic conditions in the fourth largest economy in the euro zone are deteriorating as the nation slipped into another phase of recession with jobless rate reaching 23.6%.

The euro appreciated against the dollar to currently trade around $1.3354, noting that the EUR/USD pair started the session at $1.3318 and recorded so far a high of $1.3367 and a low of $1.3313.

The sterling pound appreciated as well against the U.S. dollar after the upbeat PMI construction released earlier today, where the construction sector seems to be improving in a faster than expected pace, following the manufacturing sector which also expanded beyond expectations in March.

The royal currency however is still volatile versus the greenback, where after the news the pair recorded the highest at $1.6046, but after then the pound returned to trade lower as markets are very volatile and instable, where the GBP/USD pair is trading now at 1.6025, compared with the opening level of $1.6021.

The U.S. dollar index (USDIX), which tracks the dollar's movement against other major currencies, fluctuated as well ahead of the Federal Open Market Committee Minutes (FOMC), where we don't expect any surprise today; however, any sudden easing or comments at least can send the dollar south and other currencies to trade bullishly.