Today's session saw what could be called a reversal of risk positions after traders pared back on overzealous buys in higher yielding assets yesterday. With news yesterday that the CIT Group would avert a looming bankruptcy in the 11th hour, traders got aggressive in buying riskier currencies, but today in Asia cooler heads prevailed as the yen and dollar slid off of weekly lows as profits were taken and positions juggled ahead of Fed Chairman Ben Bernanke's semi annual testimony on monetary policy before the House Financial Services Committee.
The consensus seems to be that Bernanke will be in no rush to pull in the reigns on current stimulus projects or raise rates to combat inflation anytime in the near term.

The Yen was almost able to make back most of yesterday's losses against the Euro as EUR/JPY dropped from opening highs near 134.17 and didn't stop for a full handle to record a low 100 pips lower. Other yen crosses followed, and USD/JPY which saw early highs near 94.30 dipped below 93.80 by sessions end. The dollar saw gains across the spectrum as well, as EUR/USD fell from the 1.4230's to just near 1.4190 on the day and GBP/USD was knocked down from the 1.6550 pedestal to hit the floor near 1.6494. The AUD/USD skid from lofty levels of 0.8180 to 0.8110 as risk turned its back on the market, and the NZD/USD fell from a touch under 0.6590 to lows near 0.6530. Traders are gearing up for the testimony of the Federal Reserve Chairman as he will be asked to answer unscripted questions from Congress which could very easily spark volatility in the currency markets.

Upcoming Economic Data Releases (London Session) prior expected

7/21/20096:15SZ Trade BalanceJUN 2.01B- -
7/21/20096:15SZ Exports (MoM)JUN -7.40%- -
7/21/20096:15SZ Imports (MoM)JUN -5.70%- -
7/21/20097:00JNConvenience Store Sales YoYJUN 1.00%- -
7/21/20097:00SZ Money Supply M3 YoYJUN 4.20%- -
7/21/20098:30UK Public Finances (PSNCR)JUN 18.8B20.2B
7/21/20098:30UK Public Sector Net BorrowingJUN 19.9B15.5B