The Dow Jones Industrial Average tumbled over 100 points today, bringing the US dollar down with it.

The US dollar struggled to rally despite stronger economic data today. Risk aversion is back in play with the Dow dropping by the biggest amount in over a week.

The Canadian dollar has been on a tear. In the past three months, the currency has appreciated over 11 percent against the US dollar, putting parity within reach.

To the relief of carry and stock traders around the world, what could have been a very painful trading day ended up being a good one.

Living up to its reputation, the Non-Farm Payrolls report delivered some serious volatility to the foreign exchange markets.

Two factors contributed to the dollar's decline today, namely weak GDP growth and resurgence in carry trade demand.

Not only did US stocks not react to the 6.5 percent drop in Chinese shares, but the Dow Jones Industrial Average hit a new record high on both a closing and intraday basis.

With the number of stock accounts exceeding 100 million for the first time this month, China is extremely worried about the vulnerability of their people to a sharp contraction in wealth. At some point they may be left with no option other than to free float the Yuan, which would be disastrous for carry trades.

We saw major reversals in the financial markets today. Not only did the US dollar erase all of its losses against every major currency with the exception of the Japanese Yen, the Dow also reversed nearly all of its gains.

The market will soon be presented with more than enough fundamental data from the US economic calendar to make up for the shortened week.