The US dollar took a heavy hit on Wednesday, falling close to 2 percent against the British pound and tumbling over 1 percent versus the Canadian dollar, Japanese yen, and euro, suggesting that the currency has lost its link with risk trends.

The US dollar was the biggest loser on Tuesday as US housing data proved to be very disappointing.

The US dollar lost ground on Monday as increased risk appetite fed increased demand for FX carry trades, commodities like oil, and equities, as the S&P 500 ended the day up 3.04 percent at 909.71.

On Wednesday, the minutes from the Bank of England's May 7 meeting may not be as market-moving as they've been in the past.

The entire currency market was working with high volatility Thursday, but it was the dollar that would see some of the most significant moves for price action.

The US dollar was the weakest of the major currencies on Tuesday.

The US dollar and Japanese yen staged a comeback on Monday, though the yen was by far the strongest of the majors.

The US dollar and Japanese yen spent much of Thursday under pressure as volatile price action in currencies like the euro and British pound drove much of the FX market’s direction.

The euro remained one of the biggest laggards on Wednesday, falling against every major but the US dollar, ahead of an expected rate cut by the European Central Bank on Thursday.

There won't be any huge market-moving reports from the US on Wednesday, though many will likely look to the ADP employment change as a gauge of how Friday's US non-farm payrolls (NFP's) report may fare.