The dollar fell further against the majors in Thursday trading, sliding most against the Swiss franc and Japanese yen by about 0.6%. The Dow Jones and S&P 500 were marginally lower on the session while the Nasdaq fell by almost 0.5%. Crude oil slide by 0.5% to just above the $82-per barrel mark while spot gold was little changed on the session, holding steady around the $1,195-mark.

The North American economic calendar was light for the day, consisting of Canada's June building permits and the US initial jobless claims reading. Building permits in Canada improved by well over consensus estimates, printing at 6.5% in June versus an upwardly revised 8.2% decline in May. Weekly jobless claims in the US missed estimates for a slight improvement, instead increasing to 479k from an upwardly revised 460k in the previous week.

Rounding out this week's dataflow will be the key jobs reports from the US and Canada. At 7:00 AM will be Canada's July labor report, with consensus estimates looking for the unemployment rate to remain unchanged at 7.9%. The net change in employment is seen adding 12.5k jobs in July compared with the 93.2k surge in June. The Loonie rallied sharply following the June labor data, rallying by 1.25% versus the greenback following the release.

The key highlight will be the July non-farm payrolls report, due out at 8:30 AM. Consensus estimates are looking for non-farm payrolls to shed 65k jobs in July following the 125k jobs lost in June. The unemployment rate is forecast to edge up to 9.6%, up from 9.5% in the previous month. Traders will closely focus on tomorrow's labor report to gauge next week's FOMC monetary policy meeting, scheduled for next Tuesday. There has been increased speculation that in light of recent soft economic data and the slowing pace of the rebound, the Fed may need to resume policy easing to jumpstart the struggling economy. Additionally, the accompanying policy statement will be closely scrutinized for any in-depth discussions of possible deflationary pressure on the economy.

The Bank of England and the European Central Bank both left policy unchanged when they announced the results of deliberations earlier in the session. In the subsequent press conference, Bank President Trichet said that risks to the economic outlook are broadly balanced in an environment of uncertainty. He stated that the global economy and foreign trade may recover stronger than forecast while lingering concerns remain over the potential strains on the financial system and inflationary pressures on oil and commodity prices.