The USD ended the day weaker across the board but intraday volatility and whipsaw kept traders on their toes; most traders noting that large order to sell USD were moving through the markets and thin conditions exaggerated the moves.

Most desks report that stops and aggressive long-liquidation hit most pairs to drive prices lower across the board; USD/CAD took a major hit dropping over 400 points for a low print at 1.2124 before a bit of short-covering brought the rate back to the 1.2200 handle. Conditions were thin as expected and some traders report that firmer oil prices help support the Loonie and EURO today.

EURO almost traded 1.3000 today with a high print at 1.2993 before dropping back as volatility dropped the rate back under the 1.2800 handle briefly. Traders note that fears of a global slowdown plus intervention to slow down the rise of the Yen helped underpin the rate but all eyes were on the US FOMC rate announcement today.

As expected the Fed cut rates but the markets were expecting more than a 50 BP cut today; some desks report that the USD was "disappointed" that the cut wasn't larger but fed watchers note this leaves room for the Fed to cut more later if needed and helps the recovery in equities.

Although the DJIA has had a two-way session and will close with only slight gains; after yesterdays massive move the market likely needs to pause for a day or two and get more information before extending the recovery if that is in the works. In my view, the Majors are beginning to show signs that the bottom is in near-term but the volatile nature and thin conditions in recent trade likely mean we will cover a lot of the same ground twice. I would look for a pullback in EURO and GBP to buy and certainly sell rallies in the USD pairs.

For the day, GBP performed the best crossing the 1.6400 handle and closing firm on the day. Traders note that liquidation of Yen cross-trades likely supporting most pairs leaving the USD in a corrective mode to end the week. Look for a quiet overnight session ahead of US GDP data in the morning. Most traders are expecting a "recession-like" number so expect more downside from the USD to end the week.

Today's US Dollar Trading

•           USD ends lower after starting weaker in Asia overnight
•           Fed cuts rates as expected but only 50 BP
•           Equities firm but two-way lending pressure to the majors.

Overnight Preview

•           Look for the USD to trade sideways
•           Should be quiet ahead of US data in the morning

Looking Ahead to Thursday
All times EASTERN (-4 GMT)

•           8:30am USD Advance GDP q/q
•           8:30am USD Advance GDP Price Index q/q
•           8:30am USD FOMC Member Kroszner Speaks
•           8:30am USD Unemployment Claims
•           10:35am USD Natural Gas Storage

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com