Fri 5th Nov: Dollar braces for record highs against the single currency, markets await payrolls

Dollar hovers near record lows aganist the single currency after comments by the ECB chief Trichet led to further sell off in the dollar despite the weekly jobless claims coming lower than expected at 332k.
Last evening the ECB maintained its benchmark rate but stated that inflation would stay "significantly above 2 percent" citing oil prices as the chief culprit. Further Mr. Trichet suggested that the downside risks to the economy had risen and that fast currency movements would hurt the economy.
But these comments were taken softly by the markets who took the Euro to its late session highs of $1.2897- a whisker short of its all time high at $1.2927.
Conflicting news regarding Yasser Arafat's medical condition also caused confusion which led to a rise in the single currency and a fall in the crude oil prices by $2 as traders reflected that Mr. Arafat's succesor might solve the region's problems.
The Pound which usually mimicks the single currency's movements could not do so yesterday as yet another soft housing data and BOE's decison to leave interest rate on hold weighed on the currency.
Further jawboning from the MoF in Japan helped the Japanese currency to stay near its 106 levels. But the critical event to watch out today is the October payroll numbers which is expected to come out at 160k-175k. A number above 200k is expected to lead a euro selling while a lower number could potentially fuel yet another dollar sell off.