Dollar Dominant Ahead of NFP

The ECB underscored the massive divergence in developed world monetary policy and a strong US jobs report would add to the argument. On Thursday, the dollar was the top performer while the kiwi lagged. The teetering Australian dollar will be the focus of Asia-Pacific trading. A new set of Premium trades will be issued tomorrow before the release of the US jobs report.

The euro fell as low as 1.0988 after Draghi but managed to close above 1.1000. Still, it was another tough day for the euro as even with better growth forecasts the ECB said it could buy bonds beyond 2016 and with yields lower than 0%.

An interesting corporate development that caught our eye was Warren Buffett's Berkshire Hathaway launching euro-denominated bonds for the first time. The 3 billion euro proceeds will then be immediately converted into US dollars and returned home. It's not hard to see why; the company will sell bonds extending to 20 years and pay yields less than 1.8%.

With the ECB pinning Eurozone yields to the floor and eating up supply, this type of corporate maneuver can't help but increase in popularity and it adds another reason to expect a weaker euro in the medium term.

Elsewhere, we warned yesterday that good news wasn't providing the usual boost for the Australian dollar and the bulls finally gave up on Thursday as AUD/USD sank back to pre-RBA levels. RBA Gov Lowe left the dollar open for future cuts in his comments and construction data today underscored why. The AiG performance of construction index fell to 43.9 from 45.9. Yesterday's trade balance numbers also showed only a 1% rise in exports. If exports can only nudge higher on a 30% drop in AUD, what can boost the economy?

Otherwise, the remainder of focus on the Asia-Pacific session is on the Fed's Williams, who is speaking in sunny Hawaii.