Two major factors at work here, and a caveat:

  1. There was plenty of interest in short EUR/USD trades after the PSI that was hesitant to jump in ahead of NFP.
  2. The QE3 camp is realizing it’s on the wrong side of the trade. There is some pure USD buying going on, not just ‘risk on’ trades and gold is down almost $20.
  3. Interestingly, the bond market isn’t yet jumping off the QE3 bandwagon. Ten-year yields ran up to 2.06% from 2.01% on the data but have slumped back to 2.03%.