Despite encouraging initial jobless claims data, the dollar was unchanged versus major currencies as investors retreated to the sidelines ahead of US payrolls and unemployment report that could reinforce or unravel the recent improvement in risk sentiment. US economy is expected to generate 150,000 jobs in January, keeping the unemployment rate at 8.5%. An upside surprise would boost risk sentiment further, whereas a disappointing reading could add to the case for more stimuli from the US Fed. Any how, both outcomes could be bad news for the greenback.

Amid cautiously optimistic outlook for riskier currencies, sterling remained supported by upbeat UK construction and manufacturing data which eased some worries over the British economy. Markets await data from the more significant services sector due tonight with economists expecting a reading of 53.5, slightly below previous month's 54.0.

Australian and New Zealand dollars looked on track for a fourth straight week of gains as global risk appetite continued to improve.

Commodity Markets:
Gold 1,757.11 /oz
Brent spot 111.77 /barrel