Daily Currency Update

USD - US Dollar

Friday saw the USD weaken to close the week. Weaker NFP data was balanced by elevated prices in the ISM report, limiting the USD's decline. The USD is expected to remain somewhat softer in the near term as markets adjust Fed policy expectations. September's FOMC meeting is now fully priced for a 25bps cut. Today, the USD trades mixed, with firmness in risk assets acting as a headwind. Oil prices rose as Gaza ceasefire talks stalled and Saudi Arabia increased selling prices to Asia. Iron ore strengthened on increased Chinese demand post-holiday. Fed speakers Barkin and Williams may provide insight into the policy outlook after the jobs data.

CAD - Canadian Dollar

The CAD remains stable, holding in the upper 1.36s despite no boost from increased risk appetite or stronger crude prices. It trades slightly below its estimated fair value of 1.3618. Market attention remains on spreads, with little change despite Friday's weak US employment data. BoC policy risks hinge on the Fed outlook, and the potential for a September Fed cut could bolster market confidence in the Bank's actions. June pricing has strengthened slightly, with 17bps priced in, while July remains fully priced. Canada is set to release employment data this Friday. Observe the USD/CAD exchange rate.   

EUR - Euro

Final Eurozone Services and Composite PMI data for April mostly exceeded expectations. France's Composite index surpassed the 50 expansion point for the first time in nearly a year, while Germany's Composite reading was the strongest since last summer. The Eurozone Composite index climbed to 51.7, surpassing the preliminary 51.4, marking the highest level since last May, driven by new orders. This data supports the outlook for a soft upturn in Eurozone growth in the upcoming months. Although EUR/USD showed minimal reaction to the data, it remains well-supported in the near term.

GBP - British Pound

Sterling is performing moderately well, finding solid support in early European trade to reclaim the upper 1.25 area. With limited news, trading appears to reflect the positive risk environment and the pound's stronger technical position.