The USD had an unusually strong day yesterday, following the release of better than expected manufacturing data that boosted confidence in the US economic recovery. Following the release of the data, the EUR/USD began to tumble, eventually dropping close to 80 pips. Currently the pair is trading around the 1.3770 level. Similarly, the GBP/USD fell close to 70 pips, and is currently trading close to the 1.6240 level.
The day was not entirely positive for the dollar. Middle East turmoil is still driving investors toward safe haven currencies. As such, the greenback remains bearish against the Swiss franc. The USD/CHF cross dropped close to 40 pips since yesterday morning, and is currently trading around the 0.9280 level.
Today, investors are eagerly anticipating the release of the ADP Non-Farm Employment Change figure, set for 13:15 GMT. The figure is considered to be one of the most important US economic indicators, and heavy trading is expected as a result. At the moment, analysts are predicting a drop in the employment figure over last month. If true, the dollar could reverse yesterday's gains.
In addition, the Fed Chairman is scheduled to testify 15:00. Should he continue to voice concerns over the unemployment situation in the US, investors are likely to short the buck in evening trading.