Eric the Economist says

Friday has been a volatile trading day, the dollar fending off an attack on the lifetime high by the euro, sterling sinking without trace and commodity currencies rallying like the world was entering a new boom period. The US dollar’s failure to hold onto any gains for anything more than a fraction of an hour is a very worrying sign and the greenback is only advancing during bouts of high risk aversion (meaning rallies are effectively the result of a close-out of dollar short positions). This has been a most difficult week for the US currency with lots of high risk events, most of which printed poorly and undermined the currency. Friday’s data was mixed but offered little cheer with the Labor Departments monthly employment report revealing the economy lost 17,000 jobs in January, the first decline in employment for 4 years. There was better news when the ISM manufacturing index printed at 50.5, indicating expansion in the sector in January, following contraction in December. Ironically enough it was the ISM report which sent the dollar tumbling once again, as it helped lift stocks and risk tolerance, leading to a scramble to sell the greenback against the ‘risky currencies’ Aussie, Kiwi and Canadian dollars. Stocks had earlier opened on a high note, thanks to a timely news story reporting Microsoft had made a bid for Yahoo. The non-farm data however is a signal all is not well in the economy and this news will carry through as a hangover into next week, regardless of how the session ends today.