Could a quiet week end with a bang?

There has been a distinct lack of inspiration this week which has seen currencies drift aimlessly with very little net movement. Sterling open's marginally higher against the Euro and US Dollar and marginally lower against the Australian Dollar and New Zealand Dollar. Everything else starts today within a 20-25 pips of yesterday's opening levels.

Yesterday's data showed that the UK construction sector slowed more-than-expected in January, expanding at the weakest pace in four months. The construction PMI number declined by 1.8 points to a seasonally adjusted 51.4 in January from a reading of 53.2 in December. Despite the fall, a level above 50.0 indicates industry expansion (below 50 indicates contraction).

In the US, jobless claims dropped by 12,000 to a seasonally-adjusted 367,000 in the week ended 28th January but it is today's non-farm payroll and employment that is far more important.

Investors were interested in a joint press conference between the German Chancellor and Chinese Premier Wen Jiabao as the content had the potential to be a saviour for the Eurozone. Mr Wen Jiabao said China was "investigating and evaluating concrete ways in which it can, via the IMF, get more deeply involved in solving the European debt problem". If there investigation and evaluation were to come up with a way for China to buy Italian bonds it would be a game-changer.

As mentioned previously, it was a quiet day and there was surprisingly little reaction to the Chinese premier's comment, perhaps because most have heard it all before.

There is not much on today's data calendar but what there is, is important. Services sector purchasing manager indices (PMI's) from Australia (51.9) and China (52.5 and 52.9) came out earlier and were refreshingly positive. The Eurozone and UK are all expected to deliver figures above 50 this morning, as is the US this afternoon.

Analysts also expect good news from the US labour department with a 16th consecutive monthly increase in non-farm payrolls with forecasts for around 150,000 new jobs.

A better-than-expected US payrolls figure a month ago eventually sent the US Dollar lower, so the logic suggests another better number would send the US Dollar lower again as an improving US economy results in less appetite for safe-haven currencies.

Have a good weekend.