Investors await the release of ECB's rate decision, a day ahead of nonfarm payrolls, which both would provide a better picture on what to expect in the upcoming period.

Jitters and woes regarding European debt eased, allowing the European shared currency to trade more freely over the past few weeks, due to improvement noted in the U.S. and Germany that drives the Euro-Zone recovery, meanwhile the pound continued to suffer after the economy contracted during the fourth-quarter of 2010 by 0.50 percent.

Today's rate decision would shed the light on the bank's monetary stance for the upcoming period, where inflation threats might pressure the bank to adjust its rates and have more hawkish stance than the dovish stance that the bank is currently following.

The euro is currently trading lower against the dollar from three-month high after a report from Germany ruled out bond buybacks from the EU Financial Stability Fund. In addition, the S&P downgraded Ireland's credit rating by one notch to (A-) warning that the euro-zone credit rating may be subject to a rate cut by April if debt conditions continue unsolved.

The outlook for Ireland was shifted to negative, where S&P said that the outlook reflects the view of the uncertainties surrounding the size of Ireland additional capital needs for its largely state-owned financial sector.

At 08:30 GMT, the EUR/USD pair traded lower at 1.3795, compared with the opening levels of 1.3808 where it managed to reach the highest at 1.3825 and the lowest at 1.3782.

The Euro attempts to breach the resistance at 1.3815, but so far, the pair is trading sideway's as investors await the release of ECB's rate decision.

The pound extended its rise for the fourth-consecutive trading day, reaching 1.6214, compared with the opening levels of 1.6188 where it managed to reach the highest at 1.6243 and the lowest at 1.6173.

The pair will be affected by the release of UK's services sector performance gauge which is forecast to show that the sector expanded in December, after contracting in November. Nonetheless, the sector contracted during the fourth-quarter of 2010 as seen on UK's GDP report by 0.5 percent, noting that the sector accounts for nearly 75 percent of growth in the country.

The dollar traded higher against the yen, where its trading at 81.58, attempting to re-test the resistance at 82.00. The pair will rise further as the Stochastic Oscillator continued to trade in an oversold areas, therefore, an upside movement could be activated at the U.S. releases its jobless claims report at 13:30 GMT.

The pair's bonded by the support at 81.0 and the resistance at 82.0 where a breach of any levels, would allow another 50 point movement to the pair whether it was to the upside or to the downside.