The Senate Banking Committee showed their love for Fed Chairman Ben Bernanke by applauding him for doing a good job of managing the US economy.

The larger US trade deficit has helped to contribute to the US dollar’s weakness, but most of the sell-off in the greenback today was triggered by positive Eurozone data and the continual liquidation of short yen trades.

With the G7 meeting behind us, traders have taken the US dollar higher once again. With no major US data on the calendar, today’s move is nothing more than a relief rally.

Ahead of the looming G7 meeting this weekend, traders continued to bid the greenback higher against the major currencies whether on book squaring or profit taking.

Thanks to the comments from European Central Bank President Trichet, a March interest rate hike is a near guarantee.

The mixed price action in the US dollar today indicates that currency traders are simply marking time ahead of the ECB monetary policy meeting tomorrow and the G7 meeting this weekend.

With no US data on tap, the dollar did not have enough momentum to extend its strength against the euro and British pound.

The stronger than expected US service sector ISM report was not enough to change the prevailing themes in the currency market.

Over the past year, the US non-farm payrolls report has become incredibly difficult to trade. Large revisions are made frequently, which is reducing the accuracy and reliability of each individual report.

In February, we are beginning to see the tides shift. US data is surprising more often to the downside than to the upside, questioning the sustainability of the impressive growth that we saw in the fourth quarter.