When the European markets opened for trading this morning, the greenback came under the same brutal selling pressure that we have seen throughout the previous trading week.

The US dollar continued to sell-off for the third consecutive trading as the Fed’s disappointment hangs over the market. Personal income and personal spending both increased more than expected thanks to stimulus rebate checks.

In the first minute of trading, the Dow Jones Industrial Average broke its Bear Stearns low.  The combination of higher oil prices, the technical break in the Dow and news that Goldman Sachs put Citigroup stock on its sell list sent equities tumbling more than 200 points on an intraday basis.

The Federal Reserve left interest rates unchanged at 2% and upgraded their degree of hawkishness but unfortunately for dollar bulls, the Fed was not hawkish enough.

The FOMC interest rate decision is less than 24 hours away and the currency market is itching for a breakout.

The Federal Reserve begins their two day monetary policy meeting tomorrow and judging from the price action of the US dollar and reports from the press, dollar bulls are treading carefully on the fear that the Federal Reserve will be non-committal.

The US dollar faces two major event risks next week -- the Oil Summit in Jeddah and the FOMC rate decision.

Despite mixed economic data, the US dollar strengthened against both the euro and Japanese yen.

With no economic data released today, the US dollar weakened modestly as traders toy with the idea of whether the Federal Reserve will raise interest rates in the third quarter.

Tuesday’s US economic docket offered the dollar its most concentrated event risk for the week, yet the otherwise volatile data would deliver few surprises for a market that is already veraciously discounting future Fed rate decisions.