The problems in the sub-prime lending market have become too much for even the most optimistic trader to handle.

Even though there was no US data released today, the market had plenty of reasons to be bearish the US dollar.

Thanks to a stronger than expected non-farm payrolls report, the US dollar staged an impressive end of week rebound. Even though job growth was the weakest in two years, the health of the labor market was better than what many traders were anticipating.

For those looking for the Federal Reserve to lower interest rates in August, they may have to wait a while longer.

Now more than ever, the non-farm payrolls report has the potential to trigger sharp movements in the currency market.

Since the beginning of the week, we have seen very choppy price action in the currency market. The strong trend that manifested itself last week has gone into hiding ahead of the ECB rate decision and US non-farm payrolls report Thursday and Friday.

Recovery was the main theme in the foreign exchange market today as the yen crosses saw their biggest one-day rally since the unwinding began last Tuesday.

When the markets reopened on Sunday evening, the Japanese yen resumed its climb against everything in sight. The dollar fell victim to yen strength as it dropped just a hair shy of its 3-month low.

It has been quite a week in the financial markets with the fluctuation in currencies attracting far more attention than usual. The US dollar sold off 435 pips against the Japanese Yen, which is the widest weekly trading range we have seen in the USD/JPY pair in months.

The US dollar strengthened today, but if you ask anyone trading the currency market, they will tell you that it certainly doesn’t feel that way.