The Dollar was little changed against most of its major counterparts during yesterday's trading session, a day ahead of a key government jobs report that will shed light on the health of the U.S. economy. By yesterday's close, the USD fell slightly against the EUR, pushing the oft-traded currency pair to 1.4873. The Dollar experienced similar behavior against the GBP and closed at 1.6604. The USD did see some bullishness as well as it gained over 50 points against the JPY and closed at 90.67.
The greenback fell in the prior session after the Federal Reserve kept Interest Rates at record lows and signaled they were likely to stay there for some time to come. It also lost more ground on Thursday after European Central Bank President Jean-Claude Trichet sounded an optimistic note about a 2010 recovery and hinted at a slow-motion exit strategy for some emergency stimulus measures.
Another leading indicator released yesterday was U.S. Unemployment Claims. This number handedly beat last week's result, but failed to provide strength to the Dollar as investors await key data to be released today, in order to implement their trading strategies.
Today's Non- Farm Employment Change release is expected to have a strong impact on the U.S currency. Any result could be a surprise, and the Dollar could go either way as a result. In any case, traders are unsure how the market will react to today's data. A weak report could feed risk aversion, boost Treasuries and actually aid the U.S Dollar. Then again, a better than expected result might be seen as a sign of relative U.S. economic strength, and lift the Dollar. Or it could also encourage risk-taking and aid commodities and higher-yielding currencies at the Dollar's expense.