It was a muted to mixed response by the financial markets on Friday during the European session. Traders were looking ahead to the release of the all-important US Nonfarm Payrolls (NFP) report. The GBP/USD currency pair started to notice some selling interest as it traded near the 1.3550 level. In addition, the EUR/USD currency pair fell under 1.1450. At the same time, gold prices held just above the $3,350 mark, indicative of a market awaiting direction from forthcoming jobs data.
The GBP/USD pair hovered around 1.3550, as participants awaited the release of US NFP figures. That’s why this report is so important. Particularly, it provides an excellent look at the state of the US labor market and is able to significantly move currency valuations. The US Dollar, which had recently dipped to its lowest level since April 22, started to regain some traction, moving away from its recent lows.
At the same time, the often-volatile EUR/USD currency cross lost momentum, trading slightly lower on Friday and closing under the key 1.1450 level. Speculators said currency volatility was mainly caused by speculation ahead of the US employment report. As traders took their positions before this economic barometer, the pipe was a good representation of the calming market forces at play.
Gold prices showed an ability to hold above $3,350, tangible sign of a positive bias in the market even with a downward drift from daily peaks. According to market participants, gold’s strength was a surprise as headlines turned to the US Jobs report later this week. In these unprecedented times, the most recognized and traded precious metal frequently serves as a safe haven. Its performance is a bellwether for showing how bullish or bearish the market is.
The rebound for the US Dollar from its recent lows comes just ahead of an increased expectation for something much ado about NFP data release. The employment report is expected to provide crucial insights into job creation, unemployment rates, and wage growth in the United States. The business community prepared itself for the huge announcement. Speculation swirled over how the US Dollar would react to May Nonfarm Payrolls figures.
The tech sector faced extraordinary volatility this week. Tesla Inc. (TSLA) closed over $332 on Wednesday—and only a few days later, it was facing a deep decline, with trading below $274. When it hit, it was large — at 17%. Those fears over possible changes in corporate governance mooted by CEO Elon Musk and his buddy political figure Donald Trump triggered this fall. These sorts of developments have given pause on Wall Street, prompting growing skepticism of Tesla’s stock market performance.
As the financial world awaits the release of the US NFP report, market participants remain vigilant in their analysis of currency pairs and commodities. This is the employment data release that could have as big an effect as anything on short term trading strategies. It can have effects on long-term economic outlooks as well.