FX Market Update: Dollar in Focus as Jobs Data Looms.

• USD – Gaining modest strength, with today’s key events likely to decide whether the move can extend.
• EUR – Drifting lower mainly due to dollar strength, with little euro-specific news to drive direction.
• GBP – Weaker, pressured by a stronger dollar and a lack of near-term UK catalysts.

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USD:

The US dollar has been edging higher, and today is an important day for markets. Three key events are in focus: the US jobs report (non-farm payrolls), a likely Supreme Court decision on Trump-era tariffs, and Canadian jobs data.

Recent US data has been mixed but slightly supportive for the dollar, helped by strong business surveys and signs that layoffs may be stabilising. Today’s jobs report is expected to show modest improvement, with job growth rising to 70K and unemployment ticking down to 4.5%. If that happens, it would strengthen the view that the Federal Reserve will keep interest rates unchanged this month. Only a clearly weaker result would revive expectations of a near-term rate cut.

Markets are also watching a potential Supreme Court ruling that could declare Trump’s IEEPA tariffs illegal. While this would likely lead to fresh efforts to impose tariffs through other means, it could also result in refund claims from importers, which would hurt the government’s finances in the short term but may support growth over time.

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EUR:

The euro remains under pressure, with EURUSD now lower than earlier in the week and well below its late-December highs. Today’s euro-area data is limited, with retail sales expected to show only a small increase and an ECB official speaking later.

However, the euro is unlikely to move much on its own news. Instead, direction will largely depend on the US jobs report and broader dollar moves, leaving the euro vulnerable if US data comes in strong.

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GBP:

Sterling has continued to slide as the dollar strengthens, with GBPUSD down around 1% over the past few days. There is little UK news today to support the currency.

As a result, sterling is likely to take its lead from US developments, particularly the jobs report. The next key UK event is November GDP data next Thursday, which may offer clearer direction for the pound.

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