The US dollar fell sharply against the euro yesterday and stayed little changed today. The US currency was flat versus the Great Britain pound, while against the Japanese yen it reached the highest level since August 2009.
The euro was strong against most currencies after European Central Bank President Mario Draghi said in the statement after the policy meeting:
As regards 2013, recent data and indicators suggest that economic activity should start stabilising in the first part of the year. A gradual recovery should commence in the second part, with export growth benefiting from a strengthening of global demand and domestic demand being supported by our accommodative monetary policy stance.
The optimistic comments led to limited demand for the safety of the dollar. Positive macroeconomic reports from the United States weakened the greenback further.
Today the important report about US non-farm payrolls will be released. It can affect the Forex market in a big way, but it is hard to predict exactly how traders will react to it. A bad report should scare market participants, but a good one may lead to speculations about removal of stimulus by the Federal Reserve, spooking them all the same.
EUR/USD surged from 1.2966 to 1.3106 yesterday and traded at 1.3096 as of 4:00 GMT today. GBP/USD was little changed at 1.5005. USD/JPY climbed from 94.81 to 95.33.
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