Forex headlines for August 5, 2014:

Volatility continues to pick up, led by uncertainty in the stock market. The S&P 500 was down 5 points in the pre-market but shortly after the open it gapped down a quick 7 points. The tone improved after the ISM report and the US dollar rallied but a second round of ultra-quick selling sent the index down 10 points in minutes and Friday’s lows broke.

USD/JPY was along for the ride. It was in a steady climb since European trading and hit a high of 102.93 after the ISM data but couldn’t break 103.00 and selling began to creep in. Yet another intraday reversal hit bonds and the pair began to bleed lower alongside stocks until it hit 102.46.

EUR/USD was on the defensive in European trading, partly as EUR/GBP longs were pared. The euro bottomed at 1.3358 around the European close then posted a small bounce to 1.3375.

USD/CAD was a steady outperformer in a grind up to 1.0978 but offers ahead of the big figure and it slid back to 1.0962.

The kiwi is in focus in the hours ahead with the employment report coming up. Risk aversion definitely hurt ahead of the news with the pair falling to 0.8452.