The Greenback Is Slightly Weaker This Morning

The USD is slightly weaker this morning as investors pared back ahead of the U.S. non-farm payrolls report later in the week.

The Greenback reversed last week's gains, unable to take advantage of strong U.S. manufacturing data on Monday. Some analysts said investors capitalized on the robust U.S. data to buy into riskier assets, using the dollar to finance these trades.

Risk appetite remains a driver in the currency market; however, it stayed in the background in December as investors priced in the onset of higher U.S. interest rates in mid-2010 amid upbeat economic data.

Analysts are awaiting the U.S. payrolls figure, which would help determine the dollar's near-term direction. The median forecast of analysts is for a decline of 8,000.