On Friday, the British pound (GBP) saw some gains in European trading, rising by 0.43% against the US dollar (USD), reaching about 1.3610. This uptick seems to stem from a strong appetite for risk-sensitive assets, largely driven by positive expectations concerning a possible diplomatic resolution between the US and Iran.
At that moment, S&P 500 futures were climbing, up by 0.55%, hovering around 7,375. This indicates a robust interest in riskier investments ahead of the upcoming US non-farm payrolls (NFP) report, expected around 12:30 PM in Japan. Meanwhile, the US Dollar Index (DXY), measuring the dollar’s strength against a basket of six major currencies, dipped 0.3% to 97.95.
There seem to be growing hopes that the ceasefire between the US and Iran could hold steady after President Trump mentioned in an ABC News interview that recent strikes near the Strait of Hormuz weren’t intended to reignite conflict.
Looking ahead, many investors are keenly awaiting the US NFP data, which could offer fresh insights into the Federal Reserve’s monetary policy. Current projections suggest the Fed will maintain interest rates where they are at least until the end of the year, as indicated by the CME FedWatch tool.
The forthcoming NFP report is anticipated to show the creation of about 62,000 new jobs, which is significantly fewer than the 178,000 recorded in March. The unemployment rate is expected to remain at 4.3%. However, average hourly wages are likely to reflect a more robust growth, possibly rising to 3.8% year-on-year from 3.5% previously.
Economic Indicators
Payroll Calculation for Non-Agricultural Sectors
The Nonfarm Payrolls report provides data on new jobs created in the US across all non-farm sectors over the past month, released by the US Bureau of Labor Statistics (BLS). While monthly changes can be quite volatile, they often significantly impact the forex markets. Typically, previous revisions and unemployment rates are also very relevant, with higher job numbers seen as favorable for the US dollar and lower ones perceived negatively. Therefore, the market’s reactions will depend on a comprehensive evaluation of the BLS report’s details.
