USD - The dollar is mixed this morning, but headed into the weekend generally higher against most of its major counterparts. The dollar index reached a six-month high at 81.60 before pulling back as demand for its relative safety remains particularly strong. Despite yesterday's disappointing economic reports, stocks and commodities are higher as investors anticipate the initial public offering of tech giant Facebook. However, the modest boost to investor confidence will likely be short lived in light of deteriorating economic fundamentals in the world's largest economies. Investors will also take note of this weekend's G8 summit at Camp David with Greece being the primary topic of discussion. While no concrete policies are to be expected from such a meeting, any signal of increased cooperation amongst the world's largest economies would at least help calm some market jitters in the short term. Demand for the dollar looks to remain strong in the coming months, but technical studies are indicating that it is now overbought against a number of the G20 currencies.

EUR - The euro is headed into the weekend towards the lower end of its recent ranges as fears that Greece will soon exit the Eurozone weighs on investor confidence. The common currency nearly reached a 20-month low in early trading before reversing course as German Finance Minister Schauble told reporters that he sees up to two more years of turmoil. Europe has known a lot of's practically normal. Even so, in 12 to 24 months we'll see a calming of financial markets. Further stoking fears of contagion, Moody's cut the credit rating of 16 Spanish banks and Fitch downgraded Greece to CCC citing a likely exit from the EUR as impetus. With the intensifying crisis increasingly expected to prompt action from the ECB, former Bank President Trichet suggested to reporters that countries unable or unwilling to implement the ECB's requirements should lose their sovereignty. In light of the recent wave of political change throughout the currency bloc, comments such as these will likely not sit well with voters. Attention now turns to Ireland, which plans to hold a referendum on the Eurozone fiscal pact on May 31st with the no vote contingency quickly gaining momentum. Nevertheless, with the EUR now down 13 of the past 14 trading sessions, a rebound could be in the works after the January low of 1.2624 held.

GBP - Sterling is mixed this morning, falling against the EUR, but gaining slightly against the USD. With no major data out of the UK, the modest rally in stocks and commodities is supporting the EUR/GBP pare as investors tepidly reenter riskier positions. The BoE also announced this morning that Adam Posen, one of the MPC's most dovish members, will be leaving the Bank at the end of the summer.

JPY - The yen remains well supported despite the modest bump in stocks and commodities. However, Japanese Finance Minister Azumi told reporters this morning that excessive fx moves are undesirable and that he will monitor rates with great interest and more caution. Despite the rhetoric, the yen heads into the weekend well supported near its best levels seen since the middle of February.

Commodity Currencies - Despite a rebound in stocks and raw goods, commodity currencies remain under pressure this morning as investors are unwilling to assume riskier positions en masse. Oil is flat at $92/bbl, gold is up to$1593/oz, and copper rebounded to $350/lb. The CAD remains towards the lower end of its recent ranges on the lower price of oil, Canada's main export. Similarly, the MXN remains under pressure despite rebounding from overnight lows after yesterday's disappointing manufacturing data out of the US dims the outlook for Mexican exports. The AUD slipped to a five-month low as it heads for its third straight weekly decline against the dollar on the reduced appetite for riskier assets. The NZD is set to complete its biggest weekly drop in six months as Asian equities closed in the red after the credit downgrades in Europe.