The European Central Bank held interest rates unchanged, but this has not stopped the euro from rallying. After an especially dull press release that was practically a carbon copy of January’s statement, ECB President Mario Draghi held a press conference which provided some color. In a fantastic surge, the euro spiked above 1.06 against the greenback, but failed to sustain gains.

Investors picked up a hawkish tilt to Mr. Draghi, although he tried to keep it close to the vest. Draghi mentioned that a lot of the risks that the ECB were worried about have not materialized. The press release mentioned that if conditions threaten the progress of inflation, “the Governing Council stands ready to increase the program” of monetary stimulus. However, Draghi countered this in the conference saying that additional easing had not been discussed. His caution was tempered by improvement in the overall risks to economic growth and open up the door for a more positive tone in April’s meeting.

Oil prices fell below $50 a barrel for the first time since December. Shale production in the US is fueling a large surplus that threatens the viability of OPEC’s supply cut which has supported the argument for higher oil prices. The move has pushed CAD lower, and USD/CAD up to 1.35.

Tomorrow is jobs day, and jobs day promises volatility for currency markets. February’s nonfarm employment report is of special importance as investors are priced in for the Fed to hike rates in their meeting next week. Private payrolls on Wednesday were a solid beat far above consensus which only builds the buzz for Friday’s figures. If the numbers are far from investor estimated of 190,000+ jobs, we could see a rapid repricing and a lower USD as this could threaten Fed action on March 15.

EURUSD:   Euro stronger as investors send positive nods toward the ECB press conference.

GBPUSD:  The pound took a tumble after overnight gains, investor positioning looks like the culprit.

AUDUSD:  Aussie dollar slightly lower after the IMF comments on the vulnerabilities of China’s outlook.

USDJPY:  Yen lower as investors take on more risk and push USDJPY to upper 114s.

USDCAD:  CAD weakness as oil prices fall below $50 / barrel for the first time since December.