9.3.10 The Euro extended its three day advance against the U.S. dollar ahead of the highly anticipated nonfarm payrolls report from the world’s largest economy. Indeed, we may see whipsaw price action ahead of the report as the currency market looks for direction. Market participants should not rule out a less than usual reaction to the release as some traders are offline going into the holiday weekend. Taking a look at the economic docket overnight, the Euro strengthened against the greenback on the back of a greater than expected Euro-Zone retail sales report as figures rose 1.1 percent in July from a year ago, the European Union’s statistics office in Luxembourg said today. In the upcoming months, sales are expected to face major headwinds as household’s scale back spending amid a high unemployment rate paired with tight credit conditions and tough austerity measures by governments in the bloc in order to battle their high budget deficits. Not to overlook, the final reading for the PMI composite was revised higher, but still remained lower than last month’s reading. Across the news wire, European Central Bank governing council member Ewald Nowotny said that he sees no dramatic Forex moves, and went onto add that the euro area could have some “advantages” as some market participants may not want to invest in individual countries. Meanwhile, ECB’s Draghi said that marks are “still fragile,” and added that inflation expectations are anchored in Europe. It is noteworthy that as of late, the ECB has revised its GDP growth forecasts for the 16 member euro area in 2010 and 2011 as the current situation in the bloc looks better than policy makers thought. However, I do not expect the central bank to make any changes to its monetary policy until next year as inflationary pressures at the moment remains subdued. The greenback was fairly mixed overnight against most of its major counterparts. Nonfarm payrolls are on tap, with economists expecting the report to tumble 105,000 in August after taking a nose dive of 131,000 the month prior. At the same time, the unemployment rate is forecasted to increase to 9.6 percent from 9.5 percent in July. Nontheless, the ISM non-manufacturing composite is surveyed to come in at 53.2, which will mark the lowest level since February of this year.