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Due to a lack of major economic changes in the US, the dollar didn’t gain or drop much from previous values.

The Dow Jones and the NASDAQ both weakened, with Dow Jones posting a -1.04% change for a three-month low and the NASDAQ weakening by -0.7%. Gold weakened by a small percentage, closing at $1,062.5 per barrel, while crude oil gained to $71.68 per barrel for a 0.69% increase.

The Pound weakened against both the dollar and the euro, largely due to the recent trend of decline in stocks. The GBP/USD pair traded at a high of 1.5660 and a low of 1.5534, and the pair is currently being oversold as it continues on its downward trend. The RICS House Price Balance came out 4% higher than the expected 28%.

The euro was able to gain on the pound, despite the worries over the Greek, Spanish, and Portuguese economies.

Still, Forex investors’ worries and hesitation are evident as the euro remained unchanged against the dollar. The EUR/USD pair traded with a high of 1.3714 and a low of 1.3621, as it continues to be oversold.

The Japanese yen experienced little change against the pound, dollar, and euro. The USD/JPY pair traded at a high of 89.56 and a low of 89.15.

Thursday saw the US Non-Farm Payroll report that came out amidst hopes that it would show the US employment situation improving drastically. 

Nevertheless, the data showed a much larger drop than initially estimated: (11,000 more than expected), which raised the number of US unemployed since the recession began to 7.4 million, which is a 10.14% of the population. 

Following the release of the report, the Dollar collapsed, falling the most in one session in about two months. 

The USD had been traded up earlier in the week after the ADP payroll report and the First-Time-Filers unemployment report showed improvement, nevertheless, all the gains were quickly wiped out, as investors were relying on a strong NFP report. 

This report has been especially damaging, since it seems now unlikely that the US Federal Reserve will raise their near low interest rates at their next policy meeting in February.  Forex Investors have been hoping that a spate of positive data would spur the rate hike, yet, with the jobs situation seemingly still in decline, there is little optimism this will be the case.

The ICE Dollar Futures Index (a non-traded indicator that matches the USD performance against a basket of 6 major currencies); fell by its largest margin in two months, hitting just below 77 before recovering to close at 77.02.

At the close, the US Dollar was down 0.12% versus the Euro to 1.44 even, down 1.01% to the British Pound Sterling to 1.602, down .86% against the Canadian Dollar to 1.0301, down 0.72% to the Australian Dollar to 0.9245, down 0.92% to the New Zealand Dollar to 0.7358 and down over 1% to the Swiss Franc to 1.023.

In very light Forex trading due to Japanese and European holidays, the US Dollar was mixed as FX investors thought about the future of the Dollar after several weeks of rallies. 

The prospects for the future of the currency depends upon many factors, however the mixed data that has been coming out in recent weeks has investors confused about which direction the US economy is really going. For the moment though, due to the holidays, liquidity is very light and the news flow is very thin. 

There is no real direction for the Greenback at the moment and probably will not be until next week.

At 10:30PM GMT, the US Dollar was trading up .08% against the Euro to 1.4383, up .43% to the Japanese Yen to 91.57, down .34% versus the British Pound to 1.6001, down .91% against the Canadian Dollar to 1.0423, down .31% to the Aussie to .8867 and down .13% versus the Swiss Franc to 1.0345.

The ICE Futures Dollar Index, a non-traded indicator of the Dollar’s value against six major currencies has been up almost 4% so far in December, on its way to the for its best monthly performance since February.

At 10:43PM GMT, the index was at about 77.03, off a 3 ½ month high of 78.449 set last week.

The US Treasury is also auctioning off about 118 Billion Dollars worth of 10 year debt obligations, which is likely to cause the yields on all US Treasuries to rise. 

While it is a light market now, the auction will likely have some effect on the USD’s performance this week.  The yields on the 10 years are close to 3.95%, however Morgan Stanley is predicting 5.5% yields by the end of 2010, a disaster for US homeowners who will see their mortgage rates rise to as much as 8%. 

This is a problem for those expecting a recovery based on durable goods, consumer confidence and other “hard” data as the more the yields rise, the less likely we are to see a vigorous recovery.