The Dollar was little changed against most of its major counterparts during yesterday's trading session on a renewed bout of risk aversion. This comes prior to the release of a key government report on the U.S. labor markets due this Friday. As a result, the USD fell slightly against the EUR, pushing the oft-traded currency pair to 1.2300 levels. The dollar experienced similar behavior against the GBP and closed at around 1.4510.

As the U.S. economy stabilizes, currency traders have started to focus more on fundamentals such as economic growth and short-term interest rates. That shift, just getting underway, could weaken the soaring USD in the coming months. A stronger currency is important to the U.S. because it entices foreign investors to invest in U.S. bonds that finance the nation's record budget deficit. The downside is that it may restrain profit growth at companies with international sales by making U.S. exports more expensive.

Looking ahead to today, the most important economic indicator scheduled to be released from the U.S. is the ISM Manufacturing PMI at 14:00 GMT. Traders will be paying close attention to today's announcement as a stronger than expected result may boost the USD in the short-term. Traders should pay close attention to the market as there is an opportunity for traders to capitalize on the fluctuations which are likely to follow this release.