The fluctuation of these majors has been brought about by a number of factors; the price of crude, having dropped dramatically over the past fortnight, has eased inflationary pressures in – and, to an extent, beyond – the US, which has in turn served to strengthen the Dollar. This rally has been spurred on by reports that US Congress is looking to enact legislation to bring about tighter curbs on speculative investment, which was a large contributing factor towards the recent soaring crude oil prices.
In the Euro Zone, Germany's hitherto flourishing export industry is finally showing signs of slowing down as much as its global counterparts; given the country's dominating influence within the EU (and, by default, on the Euro), the effect of this slowdown has been tangible, resulting in the Euro losing several cents against its major rivals. GBP/EUR currently trades at 1.27.
At the time of this report, GBP experiences further weakening off the back of freshly released weak PMI data; with little other major reporting coming out of the UK today, the Sterling will most probably finish the week taking direction from its rivals.
Looking ahead, the day will most probably be shaped by the market-moving Non-Farm Payrolls report, due out of the US later this afternoon. Traditionally, this will be released with a raft of other US data, such as jobless stats and hourly earnings figures, and will undoubtedly shape the fate of the greenback for the coming week, if not longer. A significant decrease has been predicted for the NFP report; this could, paradoxically, work well for the USD, since investors have already priced the decrease into the market, and any subsequent improvement in the actual released figure could bring further strength to the currency. The same can be said for the US ISM index report, due out a few hours after the NFP report, and which has also been predicted to come out weaker than before. The last hours of the week could spell turbulence for the market.