Yesterday, the greenback saw bearish trends against its rival currencies, retreating from this week’s eight-month highs versus a basket of currencies. The greenback was greatly affected by an unexpectedly rise of Crude Oil prices and constant worries of the U.S. financial sector which tumbled the USD and set it on track for its worst one day fall in five months. The USD fell as low as 104.14 vs. the JPY and was traded against the EUR at 1.4906 from 1.4742 on late Wednesday.

In the beginning of the trading session, the USD rose against the EUR and the JPY as data that was released showed that Initial jobless claims fell last week to 432k, and the Philadelphia Federal Reserve August Business Index improved to -12.7 from -16.3 in July. However, renewed worries about home funding giants Fannie Mae and Freddie Mac ignited a rally in the debt prices of the two companies on Thursday, pushing the USD further down against its rivals. Investors are following closely the performance of these companies as growing expectation continues over how government intervention will support the two largest U.S. home funding companies and whether it will succeed in this rescue plan.

Today, we don’t expect significant economic data to come out from the U.S. economy. The only exceptional news event will be a speech by Federal Reserve Chairman Ben Bernanke. Bernanke will give a speech about financial stability at the Federal Reserve Bank of Kansas City Economic Symposium. High volatility is expected during his speech as a hawkish stance will likely remain in the subject of rising concerns about the inflation.