Traders took to the sidelines ahead of the key US jobs data later in the session, with the major currency pairs consolidating within range. The greenback remains buoyed against the majors, benefitting from continued safe-haven flows amid steep drops in global equity bourses. The Dow Jones breached key support levels, plunging by over 4% to close at a level not seen since 1997 while the Nasdaq and S&P 500 also plummeted by over 4%. Tokyo's Nikkei average is trading sharply lower by mid-session Asian trading, down by over 3%.
The dire global economic recession was underlined by rate cuts from the ECB and BoE to record lows yesterday, with both slashing its benchmark lending rate by 50-basis points to 1.50% and 0.50%, respectively. Eurozone Q4 GDP was largely inline with expectations, contracting by 1.5% q/q and 1.3% y/y.
In the coming session, markets will closely scrutinize the US February labor report. The unemployment rate is expected to spike to 7.9%, a level not seen since 1984 and up sharply from 7.6% from January. The non-farm payrolls figure is estimated to reveal a loss of 600k jobs - its worse level since 1974. While a dismal jobs report has largely been priced in by the markets, a non-farm payrolls loss on the scale of 650k or greater - its largest in over 60-years, will prompt another bout of sharp selling in US equities and prop the dollar higher against the majors.
The euro remains heavy against the greenback with interim support starting at 1.2530, followed by 1.25 and 1.2470. Subsequent floors are eyed at 1.2430, followed by 1.24 and key support at 1.2330. On the upside, resistance begins at 1.2580, followed by 1.26 and 1.2640. Additional gains will target 1.2670, backed by 1.27 and 1.2750.