Today will be all about the Dollar and the performance of the US labor market which will eventually decide whether the US currency will get a lift or come under more pressure. We've spent most of this week discussing the outlook of the greenback in light of the key events that transpired but unfortunately for the Dollar bulls none of these was a strong enough catalyst for the currency to stage a meaningful reaction.

Investors will turn their attention to the Pound over the next 24 hours taking a break from a Dollar-heavy week only to refocus on the US currency tomorrow ahead of the Non-Farm Payrolls report. Today though the Pound will be front and center with the Manufacturing PMI figures pending for release and with the British currency currently trading on either side of the 1.42 mark today's data will be key in deciding what's next.

Another day and another key event for the Dollar is scheduled over the next 24 hours just on the back of President Trump's first State of the Union address overnight. The Dollar was lower during the day but the US President delivered a dull speech last night which actually turned out a lot better than expected as there was considerable risk that Trump would reignite fears for a trade war with China. On the contrary, the Dollar remained pretty much unchanged during the SOTU address and now the focus turns on the FOMC meeting which might be greenback's best chance for a meaningful recovery at this time.

Fresh US data, elevated volatility and expectations for a more bullish message from the Fed this week are helping the Dollar recover across the board. The US currency is seeing good gains versus all of its rivals ending the day 0.3% higher after rallying as much as 0.5% during yesterday's session. Today however the spotlight will equally fall on the Dollar and the Euro at the same time: the latest Eurozone GDP and German inflation data is pending for release during the European hours while the US Consumer Confidence figures and President Trump's State of the Union address will keep traders busy later in the day.