A series of dismal U.S. economic indicators has led to general erosion in confidence in the American economic recovery as well as the U.S. dollar as a whole. Both the EUR/USD and GBP/USD pairs have increased over 100 pips in the last 24-hours. This has led some investors to question the safe haven status of the dollar. That being said, the dollar made some substantial gains against the yen throughout trading yesterday. USD/JPY shot up from 87.05 during morning trading, to its current level of 88.20.
Today, a number of news events are set to shake up dollar pairs. Both the euro-zone and the U.K. will be releasing their respective interest rate reports. While neither is forecasted to raise rates, any statements of optimism from the ECP or MPC regarding the economic recovery are likely to cause the dollar to take more losses in afternoon trading.
Additionally, traders will want to watch out for this week's U.S. unemployment claims report. Unemployment has been a constant reminder of how fragile America's economic situation is at this point. While analysts are forecasting a decrease this week in the number of people who filed for first time unemployment insurance, that decrease is likely to be negligible at best. At the same time, should the figures come in well below the expected levels, the USD may see some gains in evening trading.