Aggressive European Central Bank interest rate cuts and astounding job losses out of the US economy had surprisingly little effect on the euro.

The euro shot higher despite increasing expectations that the ECB may begin an aggressive easing policy with a rate cut at Thursday’s policy meeting.

The euro was able to reclaim some of its losses against the benchmark dollar last week, but was this a genuine trend change or a mere bounce?  That question will likely be answered by the ECB this coming Thursday.

Should the world’s policy makers proffer another coordinated effort to encourage calm in the markets, an overextended yen could see a sharp pull back as general risk appetite finds its way to a relief rally.

The Japanese Yen was one of the few currencies to lose against the US dollar through the past week of forex trade, as a marginal improvement in global risk sentiment and the US Dow Jones forced pullbacks in the Japanese currency.

Whether or not global financial markets may recover will likely be the primary driver of GBP/USD and GBP/JPY volatility.

The U.S. economy will continue to face substantial challenges including further job losses, high energy prices and a rapid deleveraging in the financial sector.

The Congressional vote of approval the US Treasury's bailout of financial markets failed to lift downtrodden stock markets, and the impressive Japanese yen rally made it the only G10 currency to finish higher against the US dollar through the week's close.

The US dollar borrowing rates climbed to their highest levels in over seven years, emphasizing banks' unwillingness to lend to one another.

Forecasts for the Japanese Yen improved on the week, as the largest bank failure in US history and broader financial market instability boosted outlook for the heavily risk-linked currency.