A huge sell-off engulfed the market today as the fears over the disastrous aftermath of the devastating earthquake and tsunami in Japan triggered a panic selling wave from Asia across in the US session. Investors' worries intensified in the wake of another explosion at the nuclear plant and the Japanese Prime Minister Naoto Kan warned about radiation leaks.

The dollar surged ahead of the FOMC meeting and on the back of haven demand, where the manufacturing data that were strong where offset on growing pessimism in the market. Investors rushed on safe haven currencies sending the dollar, yen, and swiss franc higher alongside government bonds while risky assets and high yielding currencies, equities and commodities slumped.

The dollar index which tracks the performance of the dollar versus six major counterparts traded strong striking the high of 77.02 from lows of 76.32 and currently around 76.85. The dollar has haven support and good recovery fundamentals and now the Feds are needed to acknowledge that and turn slightly hawkish to serve its medium term strength. Today they are expected to keep the monetary policy intact and the QE as it is.

Risk aversion didn't do the euro well as it slumped heavily alongside European shares to trade at the weakest of 1.3853 today versus the dollar. The fears over the outlook and the deadlock among EU leaders over means to expand the bailout added to the downside pressures. German confidence unexpectedly stalled in March and that ignited the bearishness further. The pair is steady now below 1.40 areas where it left its highs today and seemingly still biased south for today.

Sterling slumped to set the los of 1.5976 after leaving early highs at 1.6183 and currently hovering around 1.6014. Investors are shunning risk and cutting back bets on the BoE to take action as the uncertainty over the outlook is turning more negative by day amid the huge selling pressures across the board.

The Japanese yen held its grounds versus the dollar on haven demand, risk aversion, and funds repartition. The pair head south with the yen strengthening against the dollar from the early lows of 82.04 to the strongest today of 80.70 and currently hovers around 80.90 areas with still downside tendency.

We can surely see wide losses across the board with equities an commodities moving south. The negativity was from Asia today with Nikkei ending down 11% and spreading into Europe now and US equities. Oil is trading below $98 per barrel at this moment and gold slumped as well heavily and now at $1398.34.