The U.S. dollar fell sharply against the euro on Tuesday. The dollar dropped about 150 pips vs. the European currency, and the EUR/USD has peaked at the 1.4055 level as of this morning. The greenback also fell against most of the major currencies, including the Australian dollar and the Swiss franc. The dollar weakened yesterday on speculation a resumption of asset purchases by the Federal Reserve will lead to higher inflation and extend the dollar's bearish trend. Investors seem to be uncertain about holding the dollar due to the expectations that the Fed is likely to introduce a new stimulus. As a result, the dollar saw an unclear trend over the past few days, especially vs. the euro, its greatest counterpart. The dollar's ups and downs might continue into the near future, until the Fed puts an end to rumors and declares the amount of debt it is planning to purchase. Looking ahead to today, an extremely heavy news day is expected from the U.S. economy. The biggest event is of course the results of the Congressional Election, and traders are advised to keep a close eye on the updates from the elections. In addition, ADP is scheduled to release its forecast for Non-Farm Payrolls at 12:15 GMT. The ADP's forecast is considered to be very reliable, and thus tends to have a significant impact on the market. Traders are also advised to follow the Federal Funds Rate announcement. The effect of the announcement is likely to be muted as the Fed is expected to leave rates at a record low of less than 0.25%. Nevertheless, traders should be prepared for the possibility that the Fed will manipulate rates, as this is likely to have an unusual impact on the market.

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