The US dollar, as usual, traded more in line with risk trends than anything else.

While many people were watching the inauguration of President Barack Obama, equity traders were focused on the sharpest drop in State Street Corp’s shares since 1984 as the world’s largest money manager for institutions reported a doubling in unrealized bond losses.

The US stock markets were closed on Monday for the Martin Luther King, Jr. holiday, but that doesn’t mean that risk aversion couldn’t feed through from Europe into US trading.

The US dollar and Japanese yen both saw sharp reversals of their rallies from Thursday, as a pickup in risk appetite worked in the favor of higher-yielding currencies and "riskier" assets like stocks.

Trading throughout the forex markets was particularly volatile on Thursday as risk appetite shifted wildly.

The US dollar and Japanese yen remained strong on Wednesday as risk aversion remains a very real theme in the markets.

The US dollar remained strong across the majors as risk aversion remained in play following a speech by Federal Reserve Chairman Ben Bernanke.

The US dollar continues to make headway higher, especially against the more volatile British pound and commodity dollars, as flight-to-quality leaves the "safe haven" greenback in demand.

The US dollar fell versus most of the major currencies on Thursday, save the Australian dollar, as consumer credit fell by the most in at least 65-years and continuing jobless claims reached a new 26-year high.

The US dollar ended Wednesday lower versus the euro, Japanese yen, Swiss franc, and British pound amidst news that the US budget deficit is set to spiral higher this year and as data signaled that Friday’s US non-farm payroll (NFP) report could be deeply disappointing.