Petr Krpata, an FX strategist at ING, notes that the negative USD story remains intact and they look for a multi-quarter bearish dollar trend, with the latest USD rebound being a short-term correction, rather than the start of a new trend.

"The rout in equity markets and the sharp sell-off in tech stocks yesterday reversed some of the past gains in pro-cyclical currencies and temporarily helped USD, yet FX markets have already shown signs of stability overnight, with the USD rebound pausing. Some form of correction in stock markets does not come as a surprise, following their multi-month sharp rise as well as concerns about the lofty valuations, but given the Fed’s willingness to ease more as well as the uninspiring USD outlook, we don’t expect a long-lasting negative spillover into FX markets."

"The negative USD story remains intact and we look for a multi-quarter bearish dollar trend, with the latest USD rebound being a short-term correction, rather than a new trend."

"Today, the focus is on the US labour market report. Our economists look for a below-consensus NFP and an unchanged unemployment rate. With the current nervousness in the market, softer US numbers may modestly weigh on risk and further help the dollar today."