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The U.S. Dollar is trading mixed overnight. The focus this morning will be on both risk and economic data. This could create volatile trading conditions as some currencies are poised to break recent bottoms while others are finding support.

Fear over concerns about sovereign debt default and a worse than expected U.S. initial claims report helped to push commodity and stock markets lower on Thursday. Risk aversion drove investors toward safer, lower-yielding assets to the benefit of the U.S. Dollar.

Commodity and stock prices are expected to continue to see support from investors demanded higher yields although short-term overbought conditions may limit upside action. Traders are citing the stronger global economy and low interest rates in the U.S as two reasons for the renewed interest in higher yielding assets.

Stronger global equity markets contributed to the weakness in the Dollar early in the trading session as traders once again increased demand for more risky assets after reassessing U.S. economic data and the odds of an interest rate increase by the Federal Reserve.

The U.S. Dollar finished mixed against most major currencies with the massive losses coming against Pacific Rim markets.

December Treasury Bonds and Treasury Notes surged in the afternoon following better than expected results from today’s $42 billion 5-Year Treasury Note auction. The decline in U.S. 3rd Quarter GDP provided support earlier in the trading session along with weaker equity prices.

Investors continued to dump higher risk assets today triggering weekly closing price reversal tops in the December E-mini S&P 500 and the December E-mini NASDAQ. A follow-through break to the downside in both of these markets next week will confirm the reversal top and lead to the start of a 2 to 3 week break.

The stronger Dollar is putting pressure this morning on both equity and commodity markets as traders dump risky assets for the safe-haven Dollar. Equity markets were down in Asia and Europe. This weaker trend is expected to spillover to the U.S. stock markets.

The U.S. Dollar is trading lower against all majors as overnight rallies in the stock indices and gold are once again pulling the Dollar lower and signaling renewed demand for higher risk assets.

December S&P and NASDAQ stock index futures finished lower for the month while the December Dow eked out a small gain. The closing price reversal tops in the S&P and NASDAQ indicate that the selling is greater than the buying at current levels and set up the possibility for a 2 to 3 month decline.

The U.S. Dollar rallied for the fifth straight day and equities fell for the fourth straight day as investors blew out of higher risk, higher yielding assets.