The U.S. Dollar is trading mixed overnight following a strong rise yesterday. Yesterday's much anticipated break in the equity markets triggered a risk aversion rally in the foreign currency markets encouraging investors to seek the safety of the Dollar.

Today could be a much different day as a slew of U.S. economic reports may trigger a choppy, two-sided trade. Trading may also be light and directionless as investors begin to square up positions ahead of Friday's U.S. Non-Farm Payrolls Report. Today's trade is likely to be influenced by a preliminary labor number from ADP, followed by U.S. Productivity and Factory Orders Reports. In addition to these reports traders will have to deal with crude inventories and the FOMC minutes from the August 12 meeting.

Technical factors are also likely to yield a strong influence as many of the foreign currency markets approach short-term oversold levels.

Trading could be light in the EUR USD as investors await tomorrow's European Central Bank meeting. Based on the recent series of stronger economic reports, traders are looking for the ECB to leave interest rates unchanged. The key to the report will be any commentary regarding government stimulus. Traders are waiting to see if the ECB decides to end some of its stimulus programs.

The GBP USD is trading better this morning. This move is most likely technically related as the Pound has reached a short-term oversold level. Fundamentally, there has been very little to get excited about. Yesterday's announcement that U.K. manufacturing contracted more than expected was another sign that the economy is still not ready to recover. This currency pair is likely to remain under pressure until the Bank of England announces the end of its asset-buyback program. This is not likely to occur until the economy starts to show more strength.

The Japanese Yen is likely to continue to take its direction from the stock market. The weaker the stock market gets, the more risk adverse traders will get. This will continue to encourage repatriation into safety of the lower yielding Yen.

Lower energy and equity prices continue to weaken the Canadian Dollar. Comments from Bank of Canada officials are indicating its concern over the value of the Canadian Dollar. The BoC wants to see a weaker currency in order to stimulate demand for Canadian goods.

Despite lower global equity markets this morning, the AUD USD is trading better. News that the Australian economy grew more than expected triggered a short-covering rally overnight. The report showed that Aussie GDP was up 0.6%. Traders attribute this gain to the positive influence from government stimulus that encouraged consumer spending. Traders should not that all gains are likely to be erased if the U.S. equity markets have another significant break.

In summary, look for a choppy, two-sided trade today. Light volume could trigger volatile trading in both directions as major players stand aside until Friday's U.S. Non-Farm Payrolls Report.