In the currency market, the dollar rose slightly against the euro. Late Tuesday, the euro was trading at $1.4199 vs. $1.4226 on Monday. Except for the yen, the dollar gained marginally on most of its major rivals yesterday.

“Since the start of the financial crisis of 2007 there has only been one trade across all the capital markets — risk on or risk off. As equities collapsed, the dollar and the yen gained while the euro, the pound and the Aussie along with oil and gold declined,” said Boris Schlossberg, director of currency research at GFT.

“As the recovery trade took hold the process has reversed and all the risk currencies have marched almost lock in step with equity prices,” Schlossberg added.

In economic news, Bernanke was back in front of Congress yesterday, spouting economic fallacy after fallacy that the news media eagerly lapped up and politicians grossly mis-analyzed.

The always-vocal Rep.

In the currency market, the dollar rose against the euro. Late Wednesday, the euro was trading at $1.255 vs. $1.2622 on Tuesday.

The buck benefited from a flight to safety, as equities were unable to gain any traction after Tuesday’s big selloff.

In addition, “With trouble brewing in Europe, the new programs announced by the Obama administration should keep the U.S. dollar attractive to investors over the medium term,” said Kathy Lien, director of currency research at GFT.

Perhaps with fingers crossed, Fed Chair Ben Bernanke said yesterday that the “extraordinary measures” taken by the Fed to restore the flow of credit vital to the U.S. economy won’t stoke inflation.

“A significant shrinking of the balance sheet can be accomplished relatively quickly,” Bernanke said, noting that many programs are designed to automatically disappear once market conditions improve, though others will require more active intervention.

“At this point, with global economic activity weak and commodity

In the currency market, the dollar slid against the euro. Late Friday, the euro was trading at $1.2887 vs. $1.2858 on Thursday.

The session was marked more by what traders are waiting for than by what they saw.

Many had their eyes on the agenda of finance ministers and central bankers from the Group of Seven wealthy nations gathering in Rome last night and today.

While most are not expecting a significant change in the wording of the group’s communiqué today, G7 meetings are nevertheless closely watched by currency markets for crucial changes in tone that can sometimes foreshadow crucial turning points.

“Although no one is happy with the sharp moves in the U.S. dollar, Japanese yen and British pound, they may not be willing to commit to harsher language on Asian currencies,” said Kathy Lien, director of currency research at GFT. “The dollar is already strong, and a tougher stance on the

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In the currency market, the dollar sank against the euro. Late Friday, the euro was trading at $1.2932 vs. $1.2861 on Thursday.

Yesterday came the grim jobs figures everyone was expecting. The Labor Department reported that non-farm payrolls fell by a seasonally adjusted 598,000 in January after a revised loss of 577,000 in December. That marked the largest payroll loss since December 1974.

At the same time, the unemployment rate soared to 7.6%, compared with 7.2% in December. That was even worse than already-pessimistic economists’ expectations for a rise to 7.5%, and is the highest unemployment rate since September 1992.

“These numbers are dreadful but does it matter?” asked Alan Ruskin of RBS Greenwich Capital. “No,” he wrote. “All the prior labor market indicators, notably the claims data, gave a feeling of foreboding before these numbers. The data broadly delivered.”

And Kathy Lien, director of currency research at GFT, pointed out “that traders

In the currency market, the dollar was little changed against the euro. Late Thursday, the euro was trading at $1.2861 vs. $1.2846 on Wednesday.

The day’s major number was the Labor Department report that new claims for state unemployment benefits surged 35,000 to a seasonally adjusted 626,000 in the week ended January 31. That’s the highest level in 26 years.

Continuing jobless claims, a more smoothed-out figure, rose by 20,000 in the week ended January 24, to a seasonally adjusted 4.79 million, the most since the government’s record-keeping began in 1967.

All markets are girding for today’s job loss numbers, which are expected by economists’ consensus to top 500,000 for the third straight month.

Sterling rallied against both the euro and the dollar yesterday, soaring to nearly $1.47 to the buck as the Bank of England continued its aggressive interest rate policy. The BoE sliced the official bank rate to 1% from

In the currency market, the dollar slipped against the euro. Late Friday, the euro was trading at $1.3287 vs. $1.3149 on Thursday.

The buck was hurt by the latest bailout move from Washington.

As reported by MarketWatch.com, “the U.S. Treasury announced it would inject $20 billion into Bank of America Corp. (NYSE:BAC) It also will provide a backstop against losses on some $118 billion in assets as the banking giant struggles to digest its acquisition of troubled brokerage Merrill Lynch.”

Of the bailout, Kathy Lien, director of currency research at GFT, said that, “The additional funds provided to B. of A. is the only reason why the dollar is rallying against the Japanese yen, and why we are seeing a recovery in all of the higher-yielding pairs such as the euro/dollar and pound/dollar.”

Across the pond, the Irish government said it would nationalize Anglo Irish Bank, the country’s third-largest lender.

That

In the currency market, the dollar slipped against the euro. Late Wednesday, the euro was trading at $1.3618 vs. $1.3529 on Tuesday.

The buck was undermined by the day’s horrendous job number. The ADP Employment Services report, generally seen as a leading indicator for the official Labor Department data due on Friday, said yesterday that private companies cut 693,000 jobs in December, far more than the 500,000 economists were projecting.

The report paints “a shockingly weak picture of the labor market,” said economists at RDQ Economics. The labor market is on track for the largest quarterly decline since 1945, they added.

In addition, for all of 2008, companies announced a total of 1.2 million job reductions, the most since 2003 and 59% more than in 2007, according to outplacement firm Challenger Gray & Christmas.

Analysts now await with trepidation the Friday nonfarm payrolls report, with many predicting a jump in unemployment from 6.7

In the currency market, the dollar plummeted against the euro, the fourth straight day of losses. Late Monday, the euro was trading at $1.3679 vs. $1.3374 on Friday.

“After largely being confined to range trading against the major European currencies in recent weeks, the dollar has broken down,” said Marc Chandler, of Brown Brothers Harriman.

The British pound also gained 2.1% vs. the greenback, while the Swiss franc was up 1.7%.

However, “We suspect that U.S. fundamentals have not deteriorated as much as the price action is prompting the dollar bears to suggest,” Chandler said.

“Instead, we would regard the greenback’s decline as largely technical in nature, relating to profit-taking by momentum traders on the second-half dollar rally ahead of the end of the year,” he concluded.

Analysts awaited today’s interest rate decision from the Fed, with most expecting a cut of the benchmark by half a point to 0.5%, although some are

In the currency market, the dollar got slammed against the euro for a second straight day. Late Thursday, the euro was trading at $1.3314 vs. $1.3016 on Wednesday.

The day’s tone was set by a litany of horrible data, beginning with the Labor Department’s report that the number of first-time filings for state unemployment benefits jumped by 58,000, to a 26-year high of 573,000, last week.

Separately, Labor said that the prices of goods and services imported into the United States fell a record 6.7% in November.

And the Commerce Department said that the nation’s trade deficit widened 1.1% to $57.2 billion from $56.6 billion in September, vs. economists’ expectations for the deficit to narrow to $54.5 billion.

On the plus side, the Fed reported that the nation’s households paid down debts in the third quarter, for the first time since at least 1952. Households also paid off more mortgage debt than

In the currency market, the dollar moved sharply higher against the euro for the second straight day. Late Monday, the euro was trading at $1.261 vs. $1.2874 on Friday.

“There is no question that the meltdown in the equity market single-handedly triggered the sell-off in the currency market today,” said Kathy Lien, director of currency research at GFT. “The flight to safety has led to repatriation back into U.S. dollars even though there is still more trouble ahead for the U.S. economy.”

The gloomy news came in bunches yesterday. The Institute for Supply Management reported that its manufacturing index fell to 36.2% in November from 38.9% in October, its lowest reading since May 1982 and worse than economists’ expectations for a drop to 37%. Readings under 50% indicate most firms reported worsening conditions.

China’s manufacturing activity in November, as compiled by brokerage CLSA Asia-Pacific Markets, marked the sharpest drop in the