During the Asian session, the Reserve Bank of Australia will publish its Monetary Policy. Australia will also release home loan data, while China will release the Caixin Services PMI. The key event of the day will be the US jobs report. The jobs number could be critical for the US dollar which weakened on Thursday, even amid risk aversion.
Here’s what you need to know on Friday, May 5:
Wall Street fell again on banking concerns, and US bond yields hit new monthly lows on expectations of Federal Reserve rate cuts in the second half of the year. Although the Dollar Index (DXY) rose slightly on the back of the EUR/USD slide, the dollar lost ground against most of its rivals, not helped by risk aversion.
US economic data showed an increase of 6.3% (annualized rate) in Unit Labor Costs (ULC) during the first quarter and an increase in Initial Claims for Unemployment Benefits to 242,000. On Friday, the key report will be Nonfarm Payrolls. The market consensus points to an increase of 179,000 since the Unemployment Rate will remain at 3.5%.
Wells Fargo Analysts:
Although ULCs are more volatile than other measures of labor costs, their continued menacing pace adds to last week’s Employment Cost Index in curbing nascent optimism that wage pressures are starting to ease significantly. significant. The road back from inflation to 2% still seems long.
The European Central Bank (ECB) raised its interest rates by 25 basis points, which represents a slowdown compared to previous increases of 50 basis points. The central bank is expected to continue raising rates in the future. Following the ECB announcement, the euro lost ground against the US dollar, and the EUR/USD pair fell below 1.1000. The pair bounced afterwards but ended up well away from the key 1.1100 zone.
The EUR/GBP pair posted its lowest daily close in a month near 0.8750. For its part, GBP/USD rallied slightly but was unable to break above 1.2600, though it closed at its highest level since June 2022.
USD/CHF rose modestly, buoyed by the post-ECB euro slide, settling around 0.8850. On Friday, Switzerland will report on consumer inflation.
The Japanese yen was one of the best performing currencies, driven by risk aversion and declining yields in the United States. USD/JPY pared losses late on Thursday and bounced above 134.00.
The AUD/USD pair rallied for the fourth day in a row, but struggled to get back to 0.6700. The Reserve Bank of Australia (RBA) will publish the monetary policy statement on Friday.
NZD/USD rose on Thursday, approaching 0.6300. The kiwi is among the most bullish values of the week.
USD/CAD fell sharply to weekly lows at 1.3515 before consolidating at 1.3540. Crucial employment data is due to be released in Canada on Friday, with the net change in employment expected to narrow to 20,000 people.
After rising on Thursday, Gold pulled back and ended around $2,050 as it continues to search for all-time highs. Silver had the highest close in a year above $26.00. Cryptocurrencies were up, with BTC/USD gaining 1.3%. Crude oil prices ended flat after extreme volatility during the Asian session.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
