The US dollar is becoming more and more volatile after the release of Non-Farm Payroll, which indicated that the US economy is approaching a recession. Still, it fended off the downward pull as the Federal Reserve announced a $200 billion infusion into the credit market in order to ease liquidity constraints. This led the dollar to pick up against many key currencies and soaked in the largest gains against the New Zealand and Canadian dollars.

The Fed was able to prevent a major dollar meltdown in the financial markets when it announced the infusion to resolve the issues on liquidity and purged mounting pressures from the fall in employment. For the second consecutive month, the Change in Non-farm Payroll dropped as it fell to -63,000, but the slowing economy’s lowered temperament was hampered when the Fed released this emergency solution before the employment release. Moreover, other portions of the labor markets showed signs of weakening as Manufacturing Payrolls sank to a record five year low of -52,000, with the unemployment rate surprisingly falling to 4.8%. This raised the already heightened speculation that the labor market is starting to contract.