The U.S. dollar rallied against most of its counterparts during the Asian session and first few hours of the London session as the strong USD/JPY rally affected other dollar pairs. However, the dollar choked up its recent gains to the euro, pound, and commodity currencies when risk appetite surged later in the day. Weekly jobless claims data came in weaker than expected, confirming that the U.S. jobs market is currently struggling. The upcoming NFP release today should provide a better picture of how the labor market is faring as the actual figure could post a weaker increase of 198K for March. Note that the ADP non-farm employment change figure and the Challenger job cuts report both posted bleak results, which hint at a downside surprise for the NFP.
The euro lost ground to the U.S. dollar when ECB Governor Draghi sounded more pessimistic than before in his recent rate statement. However, the central bank still refrained from making any monetary policy changes as Draghi emphasized that they're running out of options. Only the euro zone retail sales and final GDP figures are on tap from the region today, which suggests that the euro might rather take its cue from the resulting sentiment from the U.S. NFP report.
Despite the quick GBP/USD selloff that took place during the start of the London session, the pair was able to recover right away when the BOE didn't announce any additional stimulus measures. On top of that, services PMI came in stronger than expected and showed a large expansion for the month of March as the reading came in at 52.4 instead of declining from 51.8 to 51.4. Only the Halifax HPI is due from the U.K. today and a weaker increase in house prices is expected.
There were no reports released from Switzerland yesterday but USD/CHF managed to stay below the .9500 handle despite the strong round of dollar-buying that took place. Today, Switzerland will print its foreign currency reserves report. Note that the previous release hinted that the SNB's peg is growing more and more expensive and today's release should highlight the unsustainability of their intervention efforts.
The yen continues to sell off because of the BOJ's aggressive easing plans announced yesterday. USD/JPY has already surged past key resistance levels and appears to be testing 97.00 prior to the NFP release, which could spark a quick selloff. However, analysts believe that the pair is headed for the 100.00 mark as the additional stimulus from the BOJ should keep the yen's value down.
Commodity Currencies (AUD, CAD, NZD)
Aside from the strong Australian retail sales and building approvals data, there weren't any other reports printed from the comdoll economies yesterday. This left the currencies vulnerable to dollar behavior and risk sentiment, which might be the same case for today. Canada is set to print its trade balance, jobs data, and Ivey PMI later today though and this could spark volatility for USD/CAD.