- EUR/USD picks up a bid on trade optimism.
- US April Nonfarm payrolls data is expected to show record job losses.
- A below-forecast reading will likely add to bearish pressures around the greenback.
The American dollar is losing altitude on trade optimism and pushing EUR/USD ahead of the all-important US Nonfarm Payrolls data scheduled for release at 12:30 GMT.
Risk-on weighs over the dollar
The futures on the S&P 500 are up more than 1% at press time and major Asian indices are flashing green.
The risk sentiment has been buoyed by reports that Chinese Vice Premier Liu He, US Treasury Secretary Steven Mnuchin, and the US Trade Representative Robert Lighthizer held a phone call late on Thursday, in which they spoke about U.S.-China trade.
As a result, the haven currencies like the US dollar and the Japanese yen are being offered. Notably, the dollar index, which tracks the value of the greenback against majors, is hovering near 99.70 at press time, representing a 0.20% drop on the day. Meanwhile, EUR/USD is trading at 1.0845, up 0.13% on the day.
Nonfarm Payrolls eyed
The NFP report is expected to show the US economy shed record 24 million jobs in April and the jobless rate rose to 14% from 4.4%, according to analysts at Goldman Sachs. “In interpreting the report, we will pay special attention to the number and share of workers on furlough or temporary layoff,” analysts said.
While staggering job losses (bigger-than-expected) could push EUR/USD higher, the gains could be moderate or short-lived, as markets appear to have priced in the bad news. After all, the evidence of job losses is everywhere, as noted by BK Asset Management’s Kathy Lien.
Technical levels
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