The dollar pushed on yesterday, taking advantage of flows out of the yen (after the BoJ interest rate meeting in the morning), better than expected ISM manufacturing numbers, and reports that the Trump administration has reached out to China to start tariff talks.
The EUR slid to its weakest level versus the GBP since 7th April, before recovering by the end of the day and sliding to a three-week low versus the USD. Markets are now pricing-in 4 additional rate cuts for the UK as concerns grow that weakness in the US economy may spread globally.
*Daily move - against G10 rates at 7:30am, 02.05.25
** Indicative rates - interbank rates at 7:30am, 02.05.25
Some positive vibes to finish the week: there have been reports that China is assessing the possibility of trade talks with the US and equity futures are all pointing to a higher opening.
USD is slightly weaker this morning as Japan stated that holding US treasuries is a negotiation card in trade talks with Washington.
Today's non-farm payrolls will be the highlight, with economists expecting 138,000 new jobs for April - slower than March, but a fairly healthy reading. This could support the dollar but markets are expecting a lower reading in May due to the impact of tariffs.
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