USD Strength Driven by Risk Aversion, Non-Farm Payrolls in Focus

The US dollar (USD) continued its upward momentum yesterday as risk aversion drove investors towards safe-haven currencies. The 'greenback' retained its strength despite the latest ISM manufacturing PMI falling short of expectations.

Meanwhile, the pound (GBP) moved within a broad range, with the UK's final manufacturing PMI offering little direction to the currency. Although the final reading was revised slightly lower, it continued to signal an improvement in manufacturing activity last month.

The euro (EUR) weakened yesterday as its inverse relationship with the strengthening US dollar weighed on the single currency. The EUR also faced headwinds from a sharp selloff in government bonds, particularly in France, which fuelled wider concerns over public debt levels across the Eurozone.

Economic data releases today may influence the movement of these currencies, particularly the US non-farm payrolls report. A robust hiring rate in the US could provide further support for the USD, while a weaker-than-expected result would likely drag the currency lower.