The dollar strengthened rapidly against the yen earlier today - or perhaps more accurately - the yen weakened a great deal against the dollar.

While some may view the wording of this as meaning the same thing, in this case it is not. There isn't really any prolonged dollar strength today as investors await the US FOMC decision this afternoon. Instead, it seems that it was simply traders selling off yen to pick up some euro’s and pounds which created the illusion of dollar strength. As positive news was released in both the UK and US today, risk appetite flourished in the UK and Europe, driving trader’s away from the safe-haven yen. As we head into the afternoon portion of the US trading day, all investors and traders are turning their attention to Washington, D.C. and are going over the strategies that they wish to implement depending on the scenario the Fed gives them this afternoon. Traders will want to be very cautious approaching the time of the announcement, as the Fed always has the potential to shock the market either by action or inaction, and this can created rather large price gaps as witnessed in March of 2009.