USD - The dollar appears to be headed into the weekend at the very top of its recent ranges against nearly all of its major counterparts. With stocks and commodities both beginning the new month with heavy losses, investors have turned to the dollar in its continued role as a relatively safe asset. The Dow Jones Industrial Average is down a further 220 points this morning, wiping out its gains for the year, after an abysmal jobs report. The much anticipated nonfarm payrolls report registered worse than even the most pessimistic of forecasts at +69k versus the consensus call of +150k. Last month's number was also revised lower to +77k versus the original reading of +115k. Meanwhile, the unemployment rate ticked higher to 8.2% from 8.1% and personal income fell to 0.2% from 0.4%. While US policymakers warned that the rebound in the labor market earlier this year likely wouldn't last, this magnitude of weakness was certainly not anticipated by most. As such, while the dollar will continue to find support in the current risk-off environment, its gains may be limited in the longer term as investors begin to price in further monetary policy easing from the Fed.

EUR - The common currency fell to a fresh two-year low overnight before rebounding sharply on rumors of imminent ECB action. Policymakers are rumored to be considering purchasing Spanish and Italian bonds directly as yields in both countries are nearing unsustainably high levels. Nevertheless, such action may be too little too late without further steps to build fiscal unity amongst the EU nations. An Irish referendum vote on a proposed pact that will strengthen ties within the region passed earlier this week despite growing support for a no vote. While the positive results are a relief, they are not necessarily indicative of a smooth road ahead towards building consensus. German policymakers remain opposed to the idea of joint debt issuance, while France would supports growth rather than forced austerity. A plan for further integration will likely ultimately be reached, but the clear divide amongst the different Eurozone nations is undermining confidence. Spain revealed just yesterday that nearly €100B had been pulled from the nation's banks in the first quarter of the year - roughly 10% of the country's GDP. The ECB will take center stage at next week's monthly policy meeting, especially after yesterday's comments from President Draghi in which he told reporters that the current configuration of the EUR will become unsustainable without further action. Draghi has already shown his willingness to take bold steps by cutting interest rates twice this year after assuming his position. As such, further monetary easing would not be surprising.

GBP - Sterling weakened overnight against both the USD and EUR despite surging demand for the relative safety of British government assets. Gilt yields fell to fresh record lows across all maturities as the ongoing crisis drives capital out of mainland Europe. However, sterling remains under pressure after British PMI manufacturing plummeted to 45.9, the weakest since early 2009, and down from 50.2 in the previous reading. All signs point to further quantitative easing from the BoE at their meeting next week, thus weighing on the near term outlook for the GBP.

JPY - The yen extended its recent gains to a 2012 high overnight before reversing sharply on mounting expectations of central bank intervention. After the disappointing jobs data out of the US sparked a rally in the safe-haven yen, it's rumored that the BoJ conducted a rate check with a number of the country's largest banks, thus spurring a retracement to back above the key 78 handle.

Commodity Currencies - Commodity linked currencies remain under pressure this morning as investors shun riskier positions. Raw goods are largely lower with oil extending its weekly declines to $83/bbl, copper dropping to $332/lb and raw goods generally lower. The CAD weakened further overnight on the falling price of oil, Canada's primary export, and as Canadian GDP came in short of expectations at 0.1%. The MXN dropped further into the red this morning, making it the worst performing currency against the USD for the week. In the month of May, the peso tumbled nearly 10% against the USD as risk appetite waned and on signs of an apparent slowdown in the US, the destination for 80% of Mexican exports. The AUD and NZD are both lower this morning after PMI data out of China - the main destination for Australian and New Zealand exports - dropped to 50.4 from 52.0 in the previous reading.