The dollar is down by over one per cent against the pound, with one dollar currently buying £0.6870, and has also lost a similar amount against the euro. The S&P 500 is currently down 1.18 per cent to 1,880.64 points.
Figures released earlier today indicated that the US economy added fewer jobs in January than in December. Private payrolls rose by 205,000 compared with 267,000 in December, according to ADP.
"One of the main reasons for lower overall employment gains in January was the drop off in jobs added at the largest companies compared to December. These businesses are more sensitive to current economic conditions than small and mid-sized companies," said Ahu Yildirmaz, head of the ADP Research Institute.
Separate business survey data released by the Institute of Supply Management (ISM) today showed that the dominant service sector, which has been responsible for most of the US's post-crisis recovery, struggled in January.
"Most of it has come after that poor ISM figure," said Jeremy Cook, chief economist at World First, a foreign exchange broker.
"In particular, the employment component of it was particularly poor and people tend to extrapolate that out into the payroll data to be released on Friday."
"We've had a broad sell-off in the dollar over the past two weeks, so the dollar has not been overly performing – I think this is a continuation of that."