Despite an elevated level of risk aversion – and the fact that the source of the risk is the European debt crisis – the euro remains “surprisingly resilient” against the safe-haven U.S. dollar, said Samarjit Shankar, managing director at Bank of New York Mellon.

Indeed, since Sept. 1, the euro has only declined 3.3 percent against the U.S. dollar.

In fact, BNY Mellon’s iFlow FX indicators show that the U.S. dollar is currently the “strongest net sold across all developed market currencies.”

Currencies that are seeing net inflows include the euro, Australian dollar, Canadian dollar, and Norwegian krone.

“The key drivers in global foreign exchange markets has been the increasing likelihood that US policy-makers may have to embark upon additional monetary easing to counter stalling growth,” said Shankar, interpreting the iFlow FX data. 

Recent comments from Federal Open Market Committee (FOMC) members also confirm that “additional monetary easing,” or QE3, remains an open option for the Federal Reserve.

William Dudley, President of the New York Federal Reserve, recently said it is “possible that [the Fed] could do another round of quantitative easing [QE3]… to provide greater stimulus,” according to Reuters.

Fed Vice Chair Janet Yellen said in a prepared speech that “securities purchases across a wide spectrum of maturities might become appropriate” if economic conditions call for them. 

Fed Governor Daniel Tarullo said in a prepared speech that “large-scale purchase of additional mortgage-backed securities” should be moved to the “top of the list of options” for “additional accommodative measures.”

Whether or not QE3 will materialize largely depends on the strength of the U.S. economy.  Fed officials and many investors form their views on this matter based largely on major U.S. economic reports.

The most important reports on the horizon are the Nov. 3 ISM Non-Manufacturing PMI and the Nov. 4 BLS non-farm payrolls report for October.