The dollar and other major currencies now face a potentially volatile Friday,depending on how investors respond to the release of U.S. January employment figures.
The consensus forecast sees nonfarm payrolls falling by about 525,000 positions in January.
However, there is heightened sensitivity to the possibility of an even weaker number given last night's news that new claims for U.S. jobless benefits are now at their highest level since the 1982 recession, and also an extremely weak January private-sector jobs report released Wednesday.
Job losses of about 600,000 or more could inflame global risk aversion again,to the benefit of traditional safe-haven instruments like the dollar and the yen.
Currency strategists at Brown Brothers Harriman in New York suggested that a very weak employment report could "stomp on optimism" that the economic downturn isn't accelerating, and might support a repeat of the price action seen after the December employment data, which set off a two-week euro downtrend.