With the big currency moves once again residing in the New York session, Asia saw a very quiet day ahead of the upcoming US employment data on Friday. Earlier today however, after unemployment claims jumped to 479K versus the expected 456K, the dollar began a journey that would see the bulk of yesterday’s gains erased. The volatility from that data had eased by New York’s lunch break with EUR/USD just off of earlier 1.3235 highs, and the pair has not strayed from that 1.3170 to 1.3195 range since, equating to tedious trading conditions here in Asia.

USD/JPY saw a small move higher to get over the 86.00 big figure to post 86.10 highs, as the yen lost a bit of steam across the currency spectrum. EUR/JPY and the crosses firmed, albeit slightly, in the face of weaker equities. A real concern for the yen is lurking if the upcoming US employment data comes in weaker than expected. In such a scenario the coveted 85.00 level which is known to be heavily fortified, could be compromised, thus pushing the yen into the “danger zone” of BoJ intervention.

Adding to today’s tedium is the fact that traders sat out the action due to the fact that tomorrow in New York at 12:30GMT we’ll have the much anticipated Non Farm Payroll data release. The forecasts for the pivotal data have a loss of -63K jobs as opposed to last month’s loss of -125K and a jump in the unemployment rate from 9.5% to 9.6%. This data could damage the dollar if we see worse than expected results, and in fact, could push the Federal Reserve into action to add further easing measures into the US economy. Surely poor results will add to the conjecture that the US economy is slipping off of the path to recovery. On the brighter side, it would seem that if the data is within a close proximity to the forecasts the dollar should benefit, while an outright dollar explosion wouldn’t be out of the realm of possibility with better than anticipated results. Regardless, tomorrow should bear witness to some dynamic currency moves. Have a nice weekend…