Non Farm Payrolls- Will it mark the way to recovery?

Non Farm Payrolls (NFP) data is crawling back into the center of attention. January’s NFP is released on Friday the 4th of February at 13:30 GMT.
As the US struggles with a stubbornly high unemployment and a sluggish growth rate, eyes turn to labor data hoping for any sign of recovery. Following an aggressively loose monetary policy, the Fed continues to keep interest rates unchanged near zero levels while the debt burdened euro zone, battles with a sovereign debt crisis. Optimism about the US recovery is improving after GDP in the fourth quarter showed an acceleration of the US growth pace. GDP showed a higher growth rate of 3.2% and a significant increase in consumer spending while austerity measures in the euro zone are hurting consumer spending. Momentum is not yet clear as the European Central Bank expressed inflation fears and talk of a possible rate hike. The possibility of the ECB increasing rates before the Fed, may provide the euro with a yield advantage, which may lead to the EURUSD moving above 1.38. NFP data will update investors’ views and decide on the momentum the market will take.
The currency markets expect the NFP report to show an increase of 121K new jobs vs. the previous month’s increase of 103K in January. A positive NFP figure will reinforce the view that the US has entered a self sustaining stage and demand for the US dollar will rise.