Forex Today: NFP is the only game in town

The US official employment report will be released on Friday, with markets closed around the world for Easter. Nonfarm Payrolls are seen rising by 240,000 in March. Trading volume will likely be light, with volatility spikes around the release of the NFP.  Before and afterwards, not much action is expected. 

Here is what you need to know on Friday, April 7:

Holidays and an empty economic calendar in Asia warrant limited price action ahead. Later, a crucial economic report amid thin trading conditions will set the environment for erratic moves in the FX board, including wide spreads. 

The Euro was the best G10 performer on Thursday. Germany offered another strong report, with February’s Industrial Production rising by 2%. EUR/USD climbed above 1.0900, and its outlook is neutral to positive. 

Data from the US showed a decline in Initial Jobless Claims to 228,000 after sharp negative revisions that point to a looser labor market. 

The labor market is starting to look not so tight according to data released this week, but the NFP will have the final word. Payrolls are expected to rise 240,000 and the Unemployment rate to stay at 3.6%. Earnings will also be watched closely. A negative report could increase the bets of no more rate hikes from the Federal Reserve. 

USD/JPY ended a three-day negative streak, moving away from a dangerous area toward 132.00, helped by the slight rebound in Treasury yields. Bank of Japan’s Haruhiko Kuroda governorship ends on Saturday.  

USD/CAD rose modestly on Thursday, but the Loonie outperformed AUD and NZD following Canadian employment data. The economy added 35,000 jobs in March, surpassing expectations. Next week, the Bank of Canada is seen staying on hold. USD/CAD held below 1.3500. 

AUD/USD fell for a third consecutive day, posting the lowest daily close in a week around 0.6670. The Kiwi fell across the board as NZD/USD suffered the biggest slide in weeks to end below 0.6250. 

The Mexican Peso outperformed among emerging market currencies, with USD/MXN falling 0.25% to 18.25. The Reserve Bank of India unexpectedly kept interest rates unchanged at 6.5%. USD/INR closed at 81.80, the weakest level in a month. 

Gold retreated further but remained above $2,000, while Silver moved sideways below $25.00. Crude Oil prices continued to consolidate, holding on to an 8% weekly gain.