Forex Today: Risk-on mood continues downing the dollar and yen, will Non-Farm Payrolls change that?

Here is what you need to know on Friday, June 5:

US markets are off the highs but the safe-haven dollar and yen remain on the back foot against all currencies, with EUR/USD getting a boost from the ECB and OPEC+ hopes behind an oomph to the loonie. All eyes are on the US Non-Farm Payrolls, which is set to show a smaller loss of jobs.

The S&P 500 dropped on Thursday, ending several days of gains. An increase in COVID-19 cases in Florida profit-taking ahead of the jobs report and ongoing protests against racial discrimination – mostly peaceful – have been cited as potential triggers for the correction. Futures are edging up early on Friday. 

All eyes on the US Non-Farm Payrolls report for June. The economic calendar is pointing to a loss of eight million jobs after shedding 20.5 million in April. Economists foresee a rise in the Unemployment Rate from 14.7% to 1.9.8% amid a low jobless rate. Wages will likely remain skewed to the upside as many low-earners have been laid off.

A horrible report may boost the safe-haven dollar and yen, yet investors seem to focus on the reopening and the fall in positions. Early indicators such as ISM's Purchasing Managers' Indexes and ADP's private sector figures have been upbeat. See:

EUR/USD is trading around 1.1350, benefiting from the European Central Bank's top-up of €600 billion to its bond-buying scheme, more than had been estimated. The ECB also committed to reinvesting proceeds and running the program through June 2021. The bank's monetary stimulus came amid Germany's stimulus package worth €130 billion and creates high hopes in the eurozone.

See ECB Analysis: Frankfurt's firepower joins Berlin's boost, EUR/USD higher levels to watch

GBP/USD is trading above 1.26, underpinned by US dollar weakness and despite the Brexit impasse. The EU and the UK conclude another round of talks on future relations without a breakthrough and hopes for a move forward lie on a meeting at the leader level. Statements on negotiations are expected later in the day.

Oil prices are advancing amid reports that Iraq has removed its objections to OPEC+ extending its petrol production cuts. Brent is above $40 and WTI tops $37. 

Crude's climb also boosted the Canadian dollar, with USD/CAD trading below 1.35. The loonie now faces Canada's jobs report, which is set to show a loss of 500,000 positions and an increase of the jobless rate to 15%. 

See Canadian jobs report: Will slower jobs losses extend CAD's climb? Two distractions to be aware of

AUD/USD is trading close to 0.70 and NZD/USD close to 0.65, as both antipodean currencies benefitting from the countries' success in defeating coronavirus in addition to USD weakness. 

Gold is trading above $1,700, consolidating previous gains and looking to respond to the NFP.

Cryptocurrencies are edging higher, with Bitcoin hovering around $9.700. Second-tier altcoins have been experiencing gains in recent days.


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