• USD is broadly stronger ahead of three central bank meetings: BoE, BoJ and ECB

• EUR fell against the USD on debates the ECB may hint at a future loosening policy

• Commodity currencies benefited from improved risk appetite as the Dow average hit new heights

USD - The dollar extended gains against most major currencies after a report showed US private employers added 198,000 jobs in February, displaying a sign of improvement in the labor market. The ADP National Employment Report showed a gain of 170,000 jobs in February and January's private payrolls were revised up to an increase of 215,000. However, new orders for US factory goods fell 2.0% in January, weighed down by a 19.8% drop in transportation equipment, military hardware and commercial aircraft. In addition, the Commerce Department also reported orders for durable goods fell 4.9% revised from 5.2%. However, durable goods orders excluding transportation were up 2.3%. On the broader front, the dollar is trading in tight ranges ahead of three central bank meetings: England, Japan, and Europe. For the year, US equities are reaching all-time highs, risk metrics are falling and the USD is broadly stronger.

EUR – The euro fell against the dollar, a day before a ECB policy-setting meeting, on concerns the central bank may flag future interest rate cuts. The ECB is widely expected to keep policy unchanged at its meeting tomorrow, though President Mario Draghi may use the news conference afterwards to hint at future loosening. Projections for both growth and inflation are likely to be on the low side, and the political stalemate in Italy following inconclusive elections is also likely to keep the euro subdued. Markets remain focused on tomorrow’s ECB meeting where interest rates are expected to remain on hold at 0.75%, and President Draghi’s tone, during the press conference, will be tightly watched.

GBP - Sterling fell today, pressured by growing indications the BoE may restart its bond-buying program to shore up a stubbornly weak economy. The British currency is expected to stay weak ahead of the central bank's policy decision tomorrow with some strategists saying the GBP/USD could fall below the $1.50 level if the BoE did increase the size of its asset purchase program. Sterling has lost about 7.3% against the dollar this year and slumped to a 2½ year low with recent comments from BoE policymakers supporting a weaker pound in order to rebalance Britain's economy.

JPY - The dollar edged up 0.2% against the yen as the BoJ prepares for its two-day policy-setting meeting tomorrow. The central bank is expected to hold rates at 0.10% and the market's attention is moving to April 3-4, where the first policy review under new Governor Haruhiko Kuroda will take place. For the year, the yen has lost nearly 8.0% against the USD.

Commodity Currencies – The Canadian dollar weakened further against the US dollar after the BoC held its overnight lending target unchanged at 1.0%, where it has been since September 2010. The central bank had been signaling for several months that it intends to raise rates, but took a step back on the sluggish Canadian economy, the muted outlook for inflation, and the imbalances in the household sector. The bank stated that the current monetary policy will likely remain appropriate for a period of time. The broad outlook for the Canadian economy was unchanged from January as it believes growth will gain momentum through 2013 with the help of modest household spending and a recovery of business investment and exports. The market's next big focus is the Canadian and US employment reports due this Friday. The higher-yielding Australian dollar got a boost from data showing Australia's economy expanded by 0.6% in the December quarter, and benefited from improved risk appetite as the Dow average hit new heights. The AUD rose 0.3% against the USD, extending its recovery from an eight-month low breached ealier this week.