US dollar faces "one of the more significant economic data points in recent history"

The US dollar (Currency:USD) has come under sustained selling pressure this week; particularly on Thursday where losses to the British pound and the euro were particularly brutal.

However, morning trade has seen a paring back of positions: The pound to US dollar is 0.14 pct in the red at 1.5579.

The euro dollar exchange rate is flat at 1.3248.

Note that the above quote is taken from the wholesale markets, your bank will affix their own discretionary spread. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please learn more here.

Sentiment turns negative to US dollar ahead of incredibly significant data release

Boris Schlossberg at BK Asset Management gives his thoughts on the state of the US dollar ahead of today's key data release:

"Sentiment has turned so negative towards the dollar over the past several days that much of downside in NFPs may already be discounted. If the payroll number prints anywhere above the 110K level the reaction in the market may be one of relief rather than disappointment as fears dissipate.

"There is no doubt that US economic activity has slowed over the past several months, but further dollar weakness will only occur if today's data suggests something more sinister - that the US economy may be starting to contract again.

"The prospect of such an outcome appears to be unlikely given the relatively steady rate of jobless claims which show that the labor markets continue to see a modicum of demand.

"The dollar may therefore stabilize and perhaps even rebound if the NFPs today prove relatively benign. However, if the number prints significantly below the 100K level the greenback could see massive downside risk with USD/JPY possibly dropping through the 94.00 level while EUR/USD will likely push through the 1.3300 resistance and cable through 1.5700 mark.

"With sentiment already skewed against the greenback, seriously bad news could trigger massive momentum moves which will likely be exacerbated by further tripping of stops.

"In short today's report could prove to be one of the more significant economic data points in recent history and could make for a very volatile North American session as the trading week comes to a close."