USD - The dollar is stronger against nearly all of its major counterparts this morning as global central banks embark on another round of monetary easing. Despite the round of stimulus measures, investor confidence is waning as central banks' arsenals look rather empty with G10 interest rates converging near 0%. As such, both stocks and commodities are beginning the day in the red, thus underpinning the dollar's safe-haven status. The dour outlook for the global economy also trumped encouraging labor market data a day ahead of the all-important NFP and unemployment reports. Weekly jobless claims declined by more than expected, coming in at 374k versus last week's 388k. Private payrolls provider, ADP, reported an unexpected gain in private employment to 176k, up from 136k in the previous reading. However, ISM non-manufacturing declined by more than anticipated, dropping to 52.1 from 53.7. While the measure remains in expansionary territory, after ISM manufacturing slipped below the key 50 level earlier this week, slower growth is troubling investors. Despite signs that global policymakers are taking steps to backstop their fledgling economies, the USD will likely remain well supported in the near term as the US economy continues to outperform many of its peers, albeit marginally.

EUR - The common currency dropped sharply in overnight trading after the ECB cut interest rates by 0.25% to a fresh all-time low of 0.75%. While a weaker currency is in line with lower yields, the knee-jerk selloff appears to have been prompted by ECB President Draghi's commentary following the decision to cut rates. We see now weakening spots of growth in the whole of the euro area including countries that had not experienced that before, Draghi told reporters. Weakness in the so-called PIIGS nations is nothing new, but the recent decline in economic data out of regional economic stalwart Germany is causing further investor concern. Nevertheless, Draghi and the ECB policymakers refrained from introducing any further stimulus measures such as another LTRO program or the direct purchase of sovereign debt in troubled nations. Meanwhile, Spain held its first debt auction since last week's EU summit, and while yields on the benchmark 10-Yr Spanish bond rose to 6.54%, they remained below recent highs. Ireland held its first auction of short-term debt after nearly two years on the sidelines and expects to return to longer-term securities in early 2013. In the near term, it looks like a test of the recent June lows at 1.2288 may be in store for the EUR/USD, but further declines may be slowed as easing from other global central banks dulls the effects of the ECB cut.

GBP - Sterling is mixed this morning, gaining against the EUR, but falling against the USD. The BoE announced that it would add £50B to its asset purchase program, bringing the total to £375B. While the boost in liquidity will limit GBP gains, the worsening conditions in mainland Europe makes the relative stability of British assets comparatively attractive.

JPY - The yen consolidated in its recent ranges as risk aversion provides support. Data released this morning showed that foreign investors were net buyers of ¥377B worth of Japanese bonds last week versus the three-month weekly average of ¥230B. However, yen gains will likely be limited ahead of next week's BoJ meeting with further stimulus measures expected.

Commodity Currencies - Despite falling stocks and raw goods, the commodity currencies generally remain supported within their recent ranges. Oil surprisingly rebounded to nearly $88/bbl, gold declined to $1609/oz, and copper fell to $349/oz. The CAD is off its overnight highs, but remains towards the top of its recent ranges as oil - Canada's main export - gains and on the encouraging labor market data out of the US. The AUD and NZD are also well supported after China surprised the market with a second interest rate cut in a month, lowering the key lending rate to 6%. As the main destination for Australian and New Zealand exports, proactive Chinese policy will provide support for the Aussie and Kiwi.