The US Dollar (USD) faced significant selling pressure, leading to a nearly 0.5% decline in the USD Index during the American session on Thursday. This was driven by a decrease in US bond yields. Market conditions remained relatively calm on early Friday, with attention shifting to the upcoming US January jobs report, featuring Nonfarm Payrolls and wage inflation figures. Additionally, the University of Michigan is set to release a revised version of the January Consumer Sentiment Index, and the Census Bureau will publish Factory Orders for December.
After Thursday's uninspiring employment-related data, the benchmark 10-year US T-bond yield dropped to its lowest level since late December, falling below 3.9%. Weekly Initial Jobless Claims exceeded market expectations for the week ending January 27, and the Employment Index of the ISM Manufacturing PMI survey dipped to 47.1 in January from December's 47.5.
In the US, Nonfarm Payrolls for January are anticipated to increase by 180,000. The Unemployment Rate is expected to edge up to 3.8%, while Average Hourly Earnings are projected to rise by 0.3% on a monthly basis.
The heat map illustrates percentage changes in major currencies against each other, using the base and quote currencies from the left column and top row, respectively.
The Bank of England (BoE) maintained the bank rate at 5.25%, in line with expectations, and adjusted its inflation projection lower for 2024. During the post-meeting press conference, BoE Governor Andrew Bailey refrained from commenting on the potential timing of a policy shift. While the initial reaction caused GBP/USD to dip, the pair later benefited from renewed USD weakness, closing above 1.2700 on Thursday and trading within a narrow range around 1.2750 early Friday.
USD/JPY experienced a second consecutive day of losses on Thursday, stabilizing around 146.50 in the European morning on Friday.
After touching a nearly 7-week low at 1.0780, EUR/USD reversed its trajectory and surpassed 1.0850. The pair continued its ascent toward 1.0900 in the early European session.
Gold exhibited bullish momentum in the latter part of Thursday, reaching its highest level since early January above $2,060. XAU/USD is currently in a consolidation phase just below $2,060 ahead of the US jobs report.
Paraphrasing text from "FX Street" all rights reserved by the original author.
