Jobs data from the US has brought back gains in the Dollar as forecasts to show the Non-farm payroll to rise in range of 175k - 225k according to estimates. USDJPY rose to 82.46 in its weekly gain, EURUSD rose to 1.3970, still staying below the 1.4000 mark after ECB's Trichet signaled rate-hike soon to come in a very hawkish press-conference yesterday, GBPUSD declined to 1.6269 as house prices declined on signs of excess supply, ADUSUD moved up to 1.0146 on demand for high-yielding currencies, USDCHF moved up to 0.9330. we expect Euro to continue its strong run as expectations for rate to be increased next month by ECB would remain strong while Dollar would gain further if job report exceed expectations. The ongoing Middle East crisis would still keep Gold and Crude Oil supported as investors would like to safe-guard their investments amid ongoing turmoil which have the ability to slowdown recovery globally.
Investors have been rooting for the ECB to hike rates amid high inflation levels and now with surging oil prices posing a price rise risk, ECB's Trichet did justice to investors calls by stating that an 'interest rate hike in the next meeting is possible' and said 'strong vigilance' multiple times to reinstate faith in investors mind that the ECB is going to do all it can to control rising inflation levels and bring back stability in the already fragile EU region. On the other hand, the Fed is not too keen to increase rates as it focuses on job improvements which were confirmed as jobless claims declined 20,000 to 368,000, lowest since May 2008 and service sector index grew more than expected. Today's NFP data could reiterate Fed's decision to extend the QE2 till June and maybe consider a QE3 if market conditions don't improve as per Fed's expectations.
Today's most important event remains the Non-farm payroll data along with private and manufacturing payrolls and unemployment rate while ECB's Noyer, Weber, Bini Smaghi, Draghi, Gonzalez-Paramo, Orphanides and Trichet speak.