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The greenback rose broadly on Thursday after the payroll data suggested the U.S. job market and economy are not as dire as the market had feared, while the ECB’s president, Jean-Claude Trichet, gave a less aggressive tone on prospects for interest rate hikes.

The greenback started to rise after the release of U.S. job data which came out near the forecast (-62K versus –60K as market expected), together with the "no bias" remarks from ECB’s president Trichet on eurozone’s interest rate, the dollar rallied to 1.5682 against the euro in mid-afternoon trading in New York, it was a biggest one-day gain since April 24, reversing from intra-day’s low at 1.5910 made before ECB’s rate decision. The U.S. dollar also rose one percent higher against a trade-weighted basket of six major currencies to 72.765.

The broad based strength in U.S. dollar also sparked selloff in sterling and the cable fell to a day’s low at 1.9800 before stabilizing in late U.S. session and traded 1.9830 at New York closing. Against the Japanese yen, dollar rose to 106.93 after the jobs data but pared some of its gains after another report showed a weak-than-expected reading on the U.S. service sector in June (ISM non-manufacturing came in at 48.2 for June compared with 51.7 in May).

Futures on the Chicago Board of Trade showed an 18 percent chance the Fed will increase its target rate for overnight lending between banks by a quarter-percentage point at its Aug. 5 meeting, compared with 25 percent odds yesterday.

On Friday, economic data releases include Japan leading indicator, German factory orders and Canada Ivey PMI. U.S. market will be closed in observance of the U.S. Independence Day Holiday.