UK and US markets are closed. Quieter trading has seen the US dollar pare some of the late Friday gains scored in the wake of the Fitch downgrade of Spanish sovereign risk.
The combination of only a one notch move, when many observers, including ourselves, believe more is justified, and a stable outlook has seems to be a case of "it could be worse". Despite the lack of follow through euro selling, few think the decline is over.
Even pressure from the European sovereign debt crisis eases for the time being, the other force we expect to underpin the dollar will likely receive more of the limelight this week. This is the relative strength of the US economy. The main focus here will be on US employment data at the end of the week. We note that the Bloomberg consensus is creeping up to now stand at 508k.