Overall: The Fed's plan to expand its balance sheet by an additional $1.5 trillion by purchasing $300 billion of Treasuries and $750 billion in agency debt and mortgage securities had a profound effect on dollar valuations this week, with the greenback hitting multi-month lows against a basket of major trading partners. Even the yuan rose, making its biggest weekly gain in more than two months as the Fed moved further into the quantitative easing process, which Bernanke said last Sunday effectively involved printing money.

But the greenbacks decline was halted on Friday as first S&P futures and then stocks traded lower, proof positive that the correlation between stocks and the dollar remains intact. Even the yuan rose, making its biggest weekly gain in more than two months as the Fed moved further into the quantitative easing process, which Bernanke said last Sunday effectively involved printing money.

There were no economic reports released from the U.S. on Friday.

The Euro (Eur/Usd) traded on relatively weak momentum during the overnight session. The pair moved lower during the Asian session, but surged somewhat higher after the London open, only to decline on the day as futures and stocks declined sharply. The euro reached a high on 1.3738 after Wednesday's FOMC announcement, the highest level since Jan. 9. Before Friday's decline, the greenback was headed for a 5.1% weekly decline versus the euro, the biggest drop since the 16-nation currency was introduced in 1999, after falling 3.4% on Wednesday after the Fed surprised markets.

In February, the German PPI was released at -0.5%, lower than market’s expectations. However, the year-over-year read has fallen to 0.9% in February, from 2.0% in January. The largest upward pressure came from energy products in the prior months, but now this trend seems to be reversing, dragging the whole index lower.

The Pound (Gbp/Usd) fell approximately 70 pips during the Asian session, but recovered everything and added a few more pips during the European trading hours. As with the euro, the pair declined on the day as futures and cash markets traded lower. After the Fed, the pound to a 7-week high on 1.4596, helped when BoE chief economist Spencer Dale told the FT today that the U.K. economy will begin expanding this year.

The Aussie (Aud/Usd) strengthened for the ninth consecutive day overnight. The pair gained 40 pips during the overnight session, but still trades below the area where it had topped in the last day of trading. The pair declined as stocks traded lower, although aussie fell the least percentage-wise. By Thursday, the Australian dollar had gained as much as 4.6% to 0.6935, extending its advance at that point to a 7.7% monthly gain, before falling on Friday afternoon.

The Cad (Usd/Cad) traded in a tight range during the Asian session, but eventually the pair moved lower after the London open. Canada's dollar reached a high on 1.2191 on Thursday, it best level since Feb. 10, before declining below 1.2380 Friday as crude declined nearly a dollar on the day.

The Swissy (Usd/Chf) fell 50 pips during the overnight session and re-tested the 200-day simple moving average, the same place where it bottomed during the last day of trading. The Swiss franc reached a high of 1.1159 to the dollar by Thursday, its best level since Jan 19, before falling to 1.1250 Friday morning despite the SNB announcing last week it was intervening to weaken the currency.

The Yen (Usd/Yen) traded below the neutral pivot point (94.90) during the overnight session, but tried a couple of times to break above. In the last few days the yen was sold heavily, breaking below the 200-pip range that held the pair for almost three weeks. The pair actually rose in N.Y. as stocks declined, giving further proof to the idea that the yen/equity correlation was broken, at least for now.