by Jes Black // At 8:30 AM US November Nonfarm Payrolls (exp 130,000, prev94,000) US November Unemployment Rate (exp 4.1%, prev 4.0%) US NovemberAverage Hourly Earnings growth (exp 0.3%, prev 0.4%) At10:00 AM US NovemberNew Home Sales (exp 928,000, prev 928,000) The dollar staved off further losses againstthe European majors after falling a full cent against the euro in Japanese trade. Theeuro/dollar rose to a fresh 6-month high of $0.9595 then consolidated around the 95.40sahead of the key US payrolls data. Yesterday, the euro rose 2.4% after the US joblessclaims figure was higher-than-expected and compounded by an upward revision of lastweek's number. Today's November non-farm payrolls could surge by more than 40%,which shows that the slowdown in demand that we have seen in the past months has nowhit the labor market. As a lagging indicator, the unemployment level is expected to edge upto 4.1% from 4.0% last month. Also weighing on the dollar was yesterday's NAPM non-manufacturing index, which dropped to 53 in December from 58.5 in November. Thisindicates significantly slower growth in the all-important services sector, which makes upthe bulk of U.S. economic output. On Tuesday the December NAPM index fell to 43,indicating that the manufacturing sector is indeed at recessionary levels, and worse off thanthe rest of the economy. Analysts expect that if today's US jobs data come worse thanexpected the single currency could go as high as $0.9700. Yesterday, US Jobless Claimsrose to 375,000 from a revised 359,000 in the prior week. The 4-week average also roseto 352,250, the highest since July 4 1998. The rise in jobless claims indicates that the USeconomic slowdown is extending to the job market. This suggests that today's Decemberlabor report will show a further cooling in the US economy which could boost the eurofurther, pushing it towards the key 97 cent level. Adding to the euro's strength was today'sEU consumer sentiment which improved to -1 from -3 last month. This shows thatconsumers are less worried about rising prices and are upbeat about their own financialoutlook. The better-than-expected figures for consumer sentiment, which show confidencebouncing back after a battering from high gasoline prices, underscore the strength of theeurozone economy. EMU-11 December Industrial confidence was unchanged at +5.Yesterday, French December Consumer Confidence Index also rose to a record high levelof +3 from November's -3. Despite the dollar's woes, the main loser today was the yen,which was weakened by comments from Japan's MoF Kuroda, who said that the euro'sstrengthening against the yen and dollar is desirable. He added that the weakness of theyen does not reflect waning trust in Japan and his comment is likely to indicate that thecurrent weakness of the euro/yen would not be a problem for the MoF. This bearish newssent the euro/yen to a fresh ten-month high of 111.72. The euro's gains also pushed thedollar to a fresh 16-month high of 116.88. Meanwhile, Cable rose above yesterday's USclose of 1.5010 to 1.5068 after the December CBI retail sales survey hit a 4-month high,and the December service surveys rose from the prior month. Now that US interest ratesare equal to those in the UK at 6%, sterling could start to gain on the yield differential.Cable also stands to gain from the euro's advance against the dollar. European bourseswere up around 0.5% as investors welcomed the willingness of the Federal Reserve to cutinterest rates. However, gains were capped ahead of key U.S. employment data at 8:30AM. Dow and Nasdaq futures are now trading at fair value.