This week continues with volatile trading in the currency markets as investors continue to digest incoming news about the world's main economies and shift expectations about global growth.

In today's news we saw the Euro-zone release a weaker reading on industrial production, which knocked the outlook for growth there, but at the same time in the US, weekly jobless claims surprised markets to the upside, climbing to a 5 month high (though not far off from where we were last week).

In addition to the unemployment rate increasing in Australia (to 5.3% from 5.1%), and the Japanese Prime Minister calling the recent rise of the Yen against the greenback rough, and the finance minister saying that he would consider appropriate action on the yen, there has been a lot to drive currency markets following yesterday's sharp sell-off in global equity markets on the back of concerns about China and the US.

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The weaker Euro-zone data, which showed industrial production declined 0.1% instead of rising 0.7% as forecast, hurt sentiment during European trading, causing the Euro (and Pound) to slide against the greenback. In addition the Greek economy contracted another 1.5% in the 2nd quarter compared to the first. It had declined 0.8% in the 1st quarter.

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The USD/JPY pair, after hitting a 15-year low in yesterday's trading below the 85 level, rebounded overnight on the comments from government officials, slumped a bit in European trading, but then accelerated again in favor of the Dollar, testing and moving above the 200-period SMA in the 1 hour charts. US equities which opened lower following the weekly jobless claims data were paring their losses in early NY morning trading.