USD - The USD begins the week mixed as global equities take an early hit after last Friday's disappointing labor market data. Nonfarm payrolls fell far short of expectations at +120k for March, the lowest in five months, versus expectations of 205k. However, with markets closing early for Good Friday, losses were held over until this morning with the DJIA falling back below the key 13,000 barrier for the first time in a month. As such, the dollar remains relatively well supported by safe?haven demand against a number of its major counterparts, but gains are being limited by renewed speculation that the Fed may again step in. Last week's surprisingly hawkish minutes from the last FOMC meeting had dashed hopes of QE3, but the ongoing struggles in the labor market are causing investors to reverse their bets. For the week ahead, investors will take note of wholesale inventories on Tuesday and import prices on Wednesday. Thursday sees the most recent reading of the trade balance, PPI data and weekly jobless claims. The week closes with CPI and U. of Michigan on Friday.

EUR - Eurozone data releases this week are light with industrial production figures for the Eurozone and France being the main feature. This leaves the EUR vulnerable to swings in sentiment towards the ongoing Eurozone debt crisis, with attention now focusing on Spain and its ability to meet its deficit targets. The EUR is trading on the weak side, but within its three day range, with support at 1.3035. With Easter holidays across Europe, there has been limited news flow. Last week saw sentiment turn against EUR as a weak Spanish auction spooked market participants and kick started a host of negative developments for Europe. Although major strides have been made with improvements on Eurozone's vulnerable economies, the EUR is poised to drift lower, with 1.25 possible by year end. The Swiss franc breached the 1.20 ceiling versus the EUR early in Asian trading today, only the second time the barrier has been crossed since the Swiss central bank introduced the currency cap on Sept. 6 but gains were quickly reversed.

GBP - GBP is flat this morning from Friday close. GBPUSD has found near term support at the 50 day MA (1.5827), though other technical indicators are mixed given the relatively narrow trading range seen over the past month. Sterling may struggle this week as the economic data is expected to reinforce a weakened outlook for the U.K. The release this week will be UK trade data for February, though broader market sentiment is likely to be driven by Italy's bond auctions and ongoing developments in expectations for Fed Policy.

JPY - The JPY is stronger vs. the USD and outperforming on the crosses as a result of better than expected trade and current account data, both of which returned to a surplus following last month's deficits. Risk aversion is also helping USD/JPY retrace some of its recent gains, after having breached previous levels of support at 82.00. Market participants will await tomorrow's BoJ statement for any changes to policymakers' outlook on easing. While we do not expect any changes today, we see USD/JPY?positive risk for the late April meeting.

Commodity Currencies - The Commodity Currencies are weaker following the unexpected slowdown in US jobs growth last week. Meanwhile, global stocks and crude oil also fell over concerns about the strength of the world's largest economy. Wall Street opened 1% lower following a slide in Asian equity markets and crude futures fell by a similar margin. The CAD weakened against the greenback as the lack of major economic data in Canada kept investors focused on the US reports. Meanwhile, the Australian and New Zealand dollars slid on broad risk aversion and China's higher than expected CPI. China's spike in inflation may have been attributed to the heightened demand for gold which rose more than 1%.

MXN - MXN ? The Mexican peso dropped nearly 2% against the USD since last week after US non?farm payroll indicated that the expansion in the US may be slowing. As Mexico's largest trading partner, negative jobs data out from the US is very bearish for the peso. Domestically, consumer prices rose 3.73% for March vs. the previous gain of 3.87%. Industrial production y/y for February is scheduled later this week with a forecasted growth of 4.7% vs. the previous 4.2%.

RMB - Yuan fixing came in at 6.3021 as March's Official CPI inflation registered above market consensus at 3.6% y/y and higher than February's reading of 3.2%. The key driver may have been bad weather linked to a jump in vegetable prices. The market will look towards March trade data tomorrow and Q1 GDP on Friday. Forecasts remain for another trade deficit of USD 24.2bn. Expectations are for a drop in growth to 8.4% y/y compared with 8.9% in Q4?2011. Look for the Yuan to continue to remain close to current levels ahead of the key economic releases.