Forex News
- Nonfarm Payrolls are expected to rise by 62K in April.
- The Unemployment Rate is seen holding steady at 4.3%.
- The USD is set to experience heightened volatility heading into the weekend.
The United States (US) Bureau of Labor Statistics (BLS) will release the Nonfarm Payrolls (NFP) data for April on Friday at 12:30 GMT.
Investors will scrutinize the underlying details of the employment report to assess whether the Federal Reserve (Fed) is likely to consider an interest-rate cut later in the year.
What to expect from the next Nonfarm Payrolls report?
Investors expect NFP to rise by 62K following the surprisingly strong 178K increase recorded in March. The Unemployment Rate is expected to remain unchanged at 4.3%, while the annual wage inflation, as measured by the change in the Average Hourly Earnings, is projected to rise to 3.8% from 3.5%.
Previewing the employment report, TD Securities analysts note that they expect to see signs of stabilization in the labor market after three volatile months.
“NFP likely increased 80K, with 85K private gains and 5K government job losses. Healthcare and leisure & hospitality will likely support most of the improvement. The Unemployment Rate rate should continue showing stabilization at 4.3%. We also expect Average Hourly Earnings to stay modest at 0.2% m/m, with the y/y moving up to 3.7%,” they add.
Automatic Data Processing (ADP) reported earlier in the week that employment in the private sector rose by 109K in April. This print followed the 61K (revised from 62K) increase reported in March. Assessing the report’s findings, “small and large employers are hiring, but we're seeing softness in the middle,” said Dr. Nela Richardson, chief economist at ADP. Meanwhile, the Employment Index of the Institute for Supply Management’s (ISM) Services Purchasing Managers’ Index (PMI) survey improved to 48 in April from 45.2 in March, reflecting an ongoing contraction in the service sector payrolls, albeit at a softening pace.
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
Read more.Next release: Fri May 08, 2026 12:30
Frequency: Monthly
Consensus: 62K
Previous: 178K
Source: US Bureau of Labor Statistics
America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.
How will the US March Nonfarm Payrolls affect EUR/USD?
The US Dollar (USD) has been struggling to stay resilient against its rivals since the beginning of May, even though the Federal Reserve’s (Fed) April policy meeting delivered a hawkish surprise, with three policymakers dissenting against the inclusion of an easing bias within the policy statement. Improving risk mood on easing geopolitical tensions in the Middle East and suspected foreign exchange market interventions by Japan emerge as primary drivers behind the USD weakness.
In the post-meeting press conference, Fed Chair Jerome Powell acknowledged that the labor demand has clearly softened but refrained from steering away from a neutral guidance because of inflation risks. “Policy is not a preset course,” Powell added, and reiterated that they are in a good place to move in either direction. In the meantime, Chicago Fed President Austan Goolsbee argued that gains in payrolls are not a good measure of labor slack anymore and noted that the labor market is “stable but not great.”
According to the CME FedWatch Tool, markets are currently pricing in about a 70% probability that the Fed policy rate will remain unchanged at the range of 3.5%-3.75% by the end of 2026. They also see a 13% chance of a 25 basis points (bps) hike and a nearly 17% odds of a 25 bps cut.
A significant negative surprise, a reading below 30K, in the headline NFP print, especially if combined with an uptick in the Unemployment Rate, could revive expectations for an interest rate cut by year-end and cause the USD to come under selling pressure with the immediate reaction.
Conversely, an upbeat NFP print, near or above the market expectation, could cause investors to refrain from pricing in policy easing later this year, as healthy labor market conditions are likely to allow Fed policymakers to take their time to assess the inflation dynamics before deciding on the next step. In this scenario, the USD could stay resilient against its peers and limit EUR/USD’s upside. However, even in this case, a strong USD rally could be hard to come by if markets remain risk-positive heading into the weekend.
Eren Sengezer, European Session Lead Analyst at FXStreet, offers a brief technical outlook for EUR/USD:
“EUR/USD’s near-term technical outlook points to a bullish tilt. The Relative Strength Index (RSI) indicator on the daily chart rises toward 60 and the pair holds comfortably above the 100-day and the 200-day Simple Moving Averages (SMA).”
“EUR/USD could face the next strong resistance area at 1.1800-1.1810, where the upper hand of the Bollinger Band and the Fibonacci 61.8% retracement of the February-April downtrend align. If the pair manages to clear this level, 1.1900-1.1910 (round level, Fibonacci 78.6% retracement) could be seen as the next hurdle before 1.2000 (psychological level, round level).”
“On the downside, an important support area seems to have formed at 1.1710-1.1680 (100-day SMA, 200-day SMA). In case EUR/USD retreats below this region and starts using it as resistance, 1.1650 (Fibonacci 38.2% retracement) could act as an interim support level before 1.1560 (Fibonacci 23.6% retracement).”
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
- Asian stock markets come under pressure as US-Iran ceasefire uncertainty revives.
- US President Trump confirms that a ceasefire with Iran is still intact.
- Investors await the US NFP data for fresh cues on the interest rate outlook.
Asian equity markets face selling pressure on Friday as risks over the sustainability of the month-long fragile ceasefire between the United States (US) and Iran have increased, following renewed clashes between both nations around the Strait of Hormuz.
During the press time, Nikkei 225 is down 0.66% to near 62,440, Shanghai slumps over 0.4% at around 4,160, and Hang Seng plunges 1.3% to near 26,280.
On Thursday, three US Navy destroyers reportedly intercepted Iranian strikes while transiting the strategic waterway and carried out retaliatory attacks, which prompted fears of renewed tensions between both nations.
However, US President Donald Trump confirmed that a ceasefire with Iran is still intact, while warning that attacks would be obvious if the temporary truce were over, CNN reported.
Meanwhile, Iran is still reviewing the US one-page memorandum of understanding (MoU), which is a 14-point peace plan, and has not delivered any breakthrough response. The one-page MoU restricts Tehran from pursuing its nuclear ambitions for a longer period and calls for the immediate reopening of the Hormuz.
Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for April, which will be released at 12:30 GMT. Investors will closely monitor the data to get fresh cues on the US interest rate outlook.
Asian stocks FAQs
Asia contributes around 70% of global economic growth and hosts several key stock market indices. Among the region’s developed economies, the Japanese Nikkei – which represents 225 companies on the Tokyo stock exchange – and the South Korean Kospi stand out. China has three important indices: the Hong Kong Hang Seng, the Shanghai Composite and the Shenzhen Composite. As a big emerging economy, Indian equities are also catching the attention of investors, who increasingly invest in companies in the Sensex and Nifty indices.
Asia’s main economies are different, and each has specific sectors to pay attention to. Technology companies dominate in indices in Japan, South Korea, and increasingly, China. Financial services are leading stock markets such as Hong Kong or Singapore, considered key hubs for the sector. Manufacturing is also big in China and Japan, with a strong focus on automobile production or electronics. The growing middle class in countries like China and India is also giving more and more prominence to companies focused on retail and e-commerce.
Many different factors drive Asian stock market indices, but the main factor behind their performance is the aggregate results of the component companies revealed in their quarterly and annual earnings reports. The economic fundamentals of each country, as well as their central bank decisions or their government’s fiscal policies, are also important factors. More broadly, political stability, technological progress or the rule of law can also impact equity markets. The performance of US equity indices is also a factor as, more often than not, Asian markets take the lead from Wall Street stocks overnight. Finally, the broader risk sentiment in markets also plays a role as equities are considered a risky investment compared to other investment options such as fixed-income securities.
Investing in equities is risky by itself, but investing in Asian stocks comes along with region-specific risks to be taken into account. Asian countries have a wide range of political systems, from full democracies to dictatorships, so their political stability, transparency, rule of law or corporate governance requirements may diverge considerably. Geopolitical events such as trade disputes or territorial conflicts can lead to volatility in stock markets, as can natural disasters. Moreover, currency fluctuations can also have an impact on the valuation of Asian stock markets. This is particularly true in export-oriented economies, which tend to suffer from a stronger currency and benefit from a weaker one as their products become cheaper abroad.
- EUR/JPY may fall toward the 11-week low around 181.87.
- The 14-day Relative Strength Index stands at 41.75, signaling persistent downside pressure.
- The primary resistance lies at the nine-day EMA at 184.62.
EUR/JPY steadies after posting a little gain in the previous trading day, hovering around 184.00 during the Asian hours on Friday. The technical analysis of the daily chart indicates the currency cross maintains a bearish near-term bias as spot holds beneath both the 50-day and nine-day Exponential Moving Averages (EMAs).
The EUR/JPY cross extends a corrective phase below the nine-period and 50-period Exponential Moving Averages (EMAs), which together reinforce a bearish near-term bias as dynamic resistance overhead.
The 14-day Relative Strength Index (RSI) at 41.75 hovers below the midline, hinting that downside pressure persists but without entering oversold territory, leaving room for further weakness if sellers retain control.
On the downside, the EUR/JPY cross may navigate the region around the initial support, around the 11-week low of 181.87, recorded on March 16, followed by a five-month low of 180.81, which was reached on February 12.
The EUR/JPY cross may rebound toward the primary resistance at the nine-day EMA of 184.62, followed by the 50-day EMA of 184.84. A successful break above the short- and medium-term averages would revive the bullish bias and support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.
(The technical analysis of this story was written with the help of an AI tool.)
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.03% | -0.09% | -0.07% | -0.15% | -0.11% | -0.03% | |
| EUR | 0.05% | 0.00% | -0.04% | -0.02% | -0.10% | -0.02% | 0.04% | |
| GBP | 0.03% | -0.00% | -0.04% | -0.03% | -0.11% | -0.03% | 0.03% | |
| JPY | 0.09% | 0.04% | 0.04% | 0.03% | -0.08% | -0.01% | 0.07% | |
| CAD | 0.07% | 0.02% | 0.03% | -0.03% | -0.12% | -0.04% | 0.04% | |
| AUD | 0.15% | 0.10% | 0.11% | 0.08% | 0.12% | 0.09% | 0.14% | |
| NZD | 0.11% | 0.02% | 0.03% | 0.01% | 0.04% | -0.09% | 0.06% | |
| CHF | 0.03% | -0.04% | -0.03% | -0.07% | -0.04% | -0.14% | -0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- USD/JPY edges lower to near 156.85 in Friday’s Asian session.
- Japanese authorities intervened in the FX market again during the May holidays.
- The US April employment report will be the highlight on Friday.
The USD/JPY pair loses ground to around 156.85 during the Asian session on Friday. The Japanese Yen (JPY) strengthens against the US Dollar (USD) following another intervention by Japanese authorities. Markets might turn cautious later on Friday ahead of the US April employment report.
Reuters reported on Friday, citing a source familiar with the matter, that Japan’s officials intervened in the foreign exchange market during holidays in early May after having conducted Japanese yen-buying operations on April 30. The source said: “The intervention since the start of May was timed to coincide with the holiday period, when market liquidity was thin.”
The potential for further interventions could provide some support to the JPY and act as a headwind for the pair. Japan’s top foreign exchange official Atsushi Mimura said on Thursday that authorities are prepared to respond on all fronts to speculative moves in the foreign exchange market.
All eyes will be on the US employment report for April, which is due on Friday. Market consensus estimates 62,000 new jobs in April. This would be a sharp drop from the 178,000 jobs added in March. Furthermore, the Unemployment Rate is projected to remain steady at 4.3%.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Citing a source familiar with the matter, Reuters reported on Friday that Japan’s officials intervened in the foreign exchange market during holidays in early May, after having conducted Japanese Yen-buying operations on April 30.
The source said: “The intervention since the start of May was timed to coincide with the holiday period, when market liquidity was thin.”
Reuters calculated the Bank of Japan's (BoJ) money market data, which suggests that Japan may have spent as much as JPY5 trillion or $32 billion in the period between May 1 and May 6.
Meanwhile, the April 30 intervention may have cost around $35 billion, according to the BoJ data.
Market reaction
The Japanese Yen (JPY) shows little reaction to the above comments, with USD/JPY holding steady at around 156.90, as of writing.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- US Dollar Index weakens as easing Middle East tensions improve overall market sentiment.
- Israel and Iran signaled easing hostilities, while Trump said the US-Iran ceasefire remains in place.
- US Nonfarm Payrolls are expected to rise by 62K in April, following a 178K increase in March.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is inching lower after registering modest gains in the previous day and trading around 98.20 during the Asian hours on Friday.
The Greenback softens amid improving market sentiment driven by the de-escalation of renewed tensions in the Middle East. Separate statements from Israel and Iran suggested that hostilities have, for the time being, subsided. US President Donald Trump also stated that the ceasefire between the US and Iran remains intact.
The US military launched strikes on the Iranian port city of Bandar Abbas and Qeshm Island in the Strait of Hormuz. A senior US official told Fox News that the attacks do not signal a resumption of the war and should not be interpreted as the end of any existing ceasefire agreement.
US Central Command confirmed that Iranian forces launched missiles, drones, and small-boat assaults against USS Truxtun, USS Rafael Peralta, and USS Mason while the three guided-missile destroyers were transiting the Strait of Hormuz. CENTCOM described the Iranian operation as unprovoked and stated that US forces responded under the right to self-defense, according to the official statement.
Meanwhile, the Trump administration is awaiting Iran’s response to a proposal intended to reopen the Strait of Hormuz and bring an end to the nearly 10-week conflict, while tensions continue to remain high across both the Persian Gulf and Lebanon. Reports indicate that Tehran is expected to communicate its response through Pakistan within the next two days.
Traders are also closely watching the upcoming April US employment report, which is forecast to show Nonfarm Payrolls increased by 62K jobs in April, compared with 178K in March, while the Unemployment Rate is expected to hold steady at 4.3%.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- Silver scales higher for the third straight day and remains on track to register weekly gains.
- The broader technical setup favors bullish traders and backs the case for further move up.
- Any meaningful corrective slide could be seen as a buying opportunity and remain limited.
Silver (XAG/USD) attracts fresh buyers following an Asian session dip to sub-$78.00 levels and stalls the previous day's late pullback from a nearly three-week high. The white metal climbs back above the $80.00 psychological mark in the last hour and remains on track to register strong weekly gains.
From a technical perspective, the XAG/USD holds a constructive bullish bias as it trades above the 100-period Simple Moving Average (SMA) and has reclaimed the 50.0% Fibonacci retracement level of the March downfall. Moreover, firmer momentum indicators reaffirm the positive bias. In fact, the Relative Strength Index (RSI) is hovering near 68, and the Moving Average Convergence Divergence (MACD) line is holding above zero. This suggests that buyers retain control in the near term even as conditions approach overbought territory.
However, it will be prudent to wait for a sustained strength and acceptance above the 61.8% Fibo. retracement barrier, ahead of the $83.00 mark, before positioning for further gains. The subsequent move up could lift the XAG/USD to the next relevant hurdle at the 78.6% level near $88.83 and the prior swing high around $96.44.
On the downside, immediate support is seen at the reclaimed 50.0% retracement at $78.66, followed by the 100-period SMA near $76.26 and the 38.2% Fibonacci level at approximately $74.47. A deeper pullback could attract dip-buying interest before the broader bullish structure is questioned.
(The technical analysis of this story was written with the help of an AI tool.)
XAG/USD 4-hour chart
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
- GBP/USD trades with mild gains near 1.3560 in Friday’s early Asian session.
- Trump said the truce with Iran is still in effect.
- Traders brace for the US Nonfarm Payrolls report later on Friday.
The GBP/USD pair posts modest gains around 1.3560 during the Asian trading hours on Friday. Hopes for a peace deal to end the Middle East conflict weaken the US Dollar (USD) as a safe-haven asset. The US April employment data will take center stage later on Friday.
US President Donald Trump said that a ceasefire with Iran is still in place despite fresh military clashes in and around the Strait of Hormuz, warning that it would be obvious if the ceasefire were over, per CNN.
The Trump administration has been waiting for Iran to respond to its proposal to reopen the critical waterway and end the war. Growing optimism surrounding a potential US-Iran peace deal could drag the USD lower and act as a tailwind for the major pair in the near term.
Traders will closely watch the highly-anticipated Nonfarm Payrolls (NFP) report. Market consensus estimates 62,000 new jobs in April. This would be a sharp drop from the 178,000 jobs added in March. Additionally, the Unemployment Rate is projected to remain steady at 4.3%.
The Bank of England (BoE) decided to leave the bank rate unchanged at 3.75% as widely expected at the last meeting, presenting a scenario framework that suggests rate hikes could be appropriate but avoiding any pre-commitment. BoE Governor Andrew Bailey warned of "forceful tightening" if energy price shocks from the Middle East conflict continue to drive inflation.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- AUD/USD struggles to gain any meaningful traction amid a combination of diverging forces.
- Renewed Iran hostilities benefit the safe-haven USD and act as a headwind for spot prices.
- The divergent RBA-Fed expectations support the pair as traders await the US NFP report.
The AUD/USD pair finds some support near the 0.7200 mark during the Asian session on Friday, though it struggles to gain any meaningful traction amid persistent geopolitical uncertainties. Nevertheless, spot prices remain within striking distance of the highest level since June 2022, touched on Wednesday, as traders keenly await the release of the closely-watched US monthly employment details.
The optimism over a potential US-Iran peace deal and the de-escalation of conflict fades rather quickly in the wake of renewed hostilities with Iran in the Strait of Hormuz. In fact, the US military said that it had intercepted Iranian attacks on three American warships transiting through the strategic waterway. Earlier, Iran accused the US of violating the ceasefire by striking multiple targets in and around the strait. This keeps geopolitical risks in play, which assists the safe-haven US Dollar (USD) in preserving the previous day's gains and acts as a headwind for the AUD/USD pair.
However, the Australian Dollar (AUD) continues to draw some support from the Reserve Bank of Australia's (RBA) hawkish tilt. In fact, the central bank indicated earlier this week that inflation remains too high and refused to rule out further tightening. In contrast, investors scaled back their expectations for a rate hike by the US Federal Reserve (Fed) in 2026 in the wake of the recent decline in Crude Oil prices. The divergent RBA-Fed policy outlooks, in turn, keep a lid on any meaningful USD appreciation and warrant some caution before placing bearish bets on the AUD/USD pair.
Traders also seem reluctant and now look forward to the US Nonfarm Payrolls (NFP) report for some meaningful impetus later during the North American session. The official report is expected to show that the US economy added 62K new jobs in April, down sharply from 178K in the previous month. The Unemployment Rate, however, is seen holding steady at 4.3%. The focus will also be on Average Hourly Earnings, which might influence Fed expectations. This, in turn, will play a key role in driving the USD demand and producing short-term trading opportunities around the AUD/USD pair.
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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