The fundamental light was burning bright for the dollar Wednesday morning, though the currency itself has yet to make a break against its major pairings. Though today’s durable goods report has removed yet another support line for second quarter growth forecasts, the flood gates were retaining momentum until the market can take its cue from tomorrow’s FOMC rate decision. For price action this morning, the majors were somewhat mixed as global markets tested investors appetite for risk.

EURUSD saw modest dollar buying that helped pull the pair down from 1.3470 resistance to later make a quick test of 1.3415. Following suit, GBPUSD marked a sharp drop in the London session that broke a noteworthy rising trendline. The pair traded all the way down to 1.9925 before slowly working its way back towards 2.0 in US hours. Hands down the market mover for the day was USDJPY. Dropping 120 points from Tuesday’s intraday high, the pair is now testing the floor on its rising trend channel with a low of 122.20 today only 20 points above a confluence of support. Unlike its action against the yen, the dollar didn’t generate much heat against the Swiss franc. USDCHF traced out a third session of its tight 30-point band below 1.23.

Keeping the ball rolling from Monday and Tuesday’s housing data, today’s docket raised the bar with the monthly read on durable good orders. The market’s reaction to this report is notoriously fickle; and today’s price action put the indicator back into the non-mover column. Ignoring the dollar’s response to this morning’s report for a moment, the gauge offered some surprises. According to the government’s number, orders with a lifespan of three or more years dropped 2.8 percent, more than double the 1.0 percent contraction economists had predicted. A 22 percent drop in the transportation component - led by a 32 percent drop in orders for planes at Boeing - exerted more than its fair share of weight on the overall indicator; but the numbers still disappointed even when this group was excluded from the calculations. The so-called core number, excluding the transportation complex, fell 1.0 percent, the most in four months. A quick scan of the break down revealed that few of the components actually put up positive numbers. Perhaps the most noteworthy figure within the entire report was the 3.0 drop in non-defense capital goods orders excluding aircraft - a proxy for capital expenditures. Should corporate investment peter out in the coming months, expectations for a rebound in factory activity and a rebound in GDP could quickly fall away.

While the US docket was certainly drawing its own crowd, there was some big movement in the overnight session that could not attributed directly to the nation’s economic calendar. Instead, the exaggerated movement in the yield pairs suggested activity in the after hours was spurred by a shake up in the market’s tolerance for risk. Though it is hardly the end of low volatility and the carry trade, there was a clear aligning of the stars across the global markets hinting to a least a modest pull back in risk appetite. Benchmark equity indices, government debt yields and commodity prices the world over were all on the lam. Monitoring the Bear Stearns situation as a potential trigger to a deeper pull back, the firm announced it would attempt to rescue only one of its internal hedge funds with guidance of its top mortgage trader and $1.6 billion in capital. Savvy macro traders will be watching the effect on prices in the CDO market as Bear tries to trim it portfolio and allows its other firm to collapse. Looking ahead to tomorrow, the market will be on hold until the afternoon’s FOMC decision, though few are expecting little from the policy body - possibly offering good prices for risk premiums.

Despite a few, big name positive earnings reports this morning, the global sweep in equities kept the US indices under pressure. By 15:10 GMT, the Dow was working on the biggest move in a 0.28 percent drop to 13,300.18. The S&P 500 followed up with a 0.18 percent contraction of its own to 1,490.24 while the Nasdaq Composite put up a marginal advance to 2,575.70. After weeks of M&A and macro-led moves, the stock pages headlines were once again topped by corporate deliverance. Tech bellwether Oracle kicked things off last night after the closing bell with a 23 percent increase in profit from last year. With additional strength in baseline earnings and revenues, shares of Oracle rose 1.7 percent to $19.49 today. Another big name release its numbers was shoe and athletic banding firm Nike. Though its fourth quarter fiscal earnings results came inline, its revenues actually beat the consensus, leading shares on a $3.15 or 5.9 percent rally to $59.97.

A stiff breeze in risk aversion in Asian and European government bonds caught up to treasury paper in the States. The ten-year was working its way higher on a 7/32nds pick up to 95-24 that managed to whittle 3 basis points from its yield to 5.049 by 15:10 GMT. T-bonds advanced 10/32nds to 93-18 while their own yields slipped 2 basis points to 5.177.

John Kicklighter is a Currency Strategist at FXCM.