After gathering some positive momentum at the end of last week from US employment data, the US Dollar now faces a new ordeal. As the US Supreme Court attempts to block the sale of Chrysler to Fiat, recently gained confidence in the US economy has begun to show signs of wear. Forex traders may see added volatility to a market that was forecast yesterday to be flat. News events such as this tend to push markets in a way which traders can greatly benefit. Today is a great day to trade the USD!

The Dollar moved on a number of factors in yesterday’s trading. One of the most important of these was the sale of Chrysler being blocked by U.S. Supreme Court. President Obama fears that this could kill the deal if the issue is not resolved in the nearest time. If this did happen, the effects on the U.S. economy may be disastrous. In turn, the Dollar may plummet as people could lose confidence in the American economy. In the meantime, forex traders are also trading on other issues, such as Obama’s plan for economic recovery.

The Dollar rose against most of its major currency pairs yesterday, as Obama unveiled his plan to create new jobs, and tackle rising unemployment. The EUR/USD finished Monday’s trading lower by nearly 100 pips at the 1.3886 level. The USD also rose about 80 pips against the CHF to close at the 1.0934 level. However, the USD lost ground against the British Pound, as optimism returned to Britain, after the opposition Conservative party faired well in the European elections. The GBP/USD cross finished higher at 1.6024.

Today, U.S. Treasury Secretary Timothy Geithner is set to be asked about the TARP (Troubled Asset Relief Program) repayments and forecasts for U.S. economic recovery in a Senate hearing at around 14:30 GMT. It would be a wise move for forex traders to open up their USD positions both prior to and after this major news event, as the market is set to be very volatile throughout today’s trading.