The market is back at full power with the U.S. markets returning from the long Independence Day weekend. The dollar is rising on needed correction and the euro is weighed by its everlasting dilemma and sterling is surging on a sigh of services relief!

As we widely expected yesterday, thin holiday trading yesterday and the absence of the United States limited the effect of the comments from S&P which today are back affecting the market in full capacity and pressuring the euro lower for the second day and falling in benefit of greenback that rose against its major peers.

The dollar index that tracks greenback's performance is currently trading higher by nearly 0.3% at 74.50 from opening low of 74.25 and recorded the high of 74.55. With the return to the market and after the heavy losses endured last week the dollar started the week on an upbeat tone with the focus on the jitters in Europe and rating agencies warnings that the French proposal to rollover Greek aid in the new bailout under construction will still put Greece in effective default according to what S&P said yesterday.

The euro was battered by this sentiment, the need for correction, and also downbeat fundamentals today. The slowing services sector in the euro area and across its major economies was very downbeat on the euro amid debt woes and ahead of the ECB decision. The EUR/USD trended south to the low of 1.4460 and currently slightly above around 1.4465 down by nearly 0.5% from opening levels of 1.4536.

We can see the euro's downside move only logical and only supportive for the market to react to the decision on Thursday shall Trichet deliver the rate hike promised in the last meeting; bolstering expectations for more euro bullishness to be seen still.

As for sterling, the scenario was at odds today with the royal pound surging higher after the services PMI unexpectedly held its grounds in June and eased fears over the pace of slowdown in the United Kingdom that has been only hammered by bearish data in the recent period.

The GBP/USD rallied to the high of 1.6127 and currently trading bullishly around 1.6104 higher by 0.13% as the pair recovered from heavy early losses after recording the low of 1.5992.

We can see the mixed sentiment still evident with cautious market movement; the dollar is supporting commodities also with the expected rebound in factory orders and seen optimism over the outlook for growth in the second half opposed to the slowdown in the second quarter seen. Therefore, the volatility will continue for today and for this week with critical data to be release and eyes focused on the ECB and the U.S. jobs report.