Forex Market Majors Consolidate on Turbulent Trading Day

• Pound and Euro Both Holding Steady  
• US NFP Numbers Stronger Than Expected
• Wall Street Gives Up Prior Gains

There was more of an optimistic mood in the forex market headed into Friday trading. This comes on the back of gains in the previous trading day and slight weakness in the Dollar. This weakness helped both the Pound and Euro hold onto their higher positions early and seemed to be related to a cautious approach as US NFP job numbers which came in higher than expected. On Wall Street, Thursday brought gains across all major indices though these were largely returned on Friday.

NFP Data Causes Friction

US Dollar selling continued early on Friday as traders await employment numbers from the Department of Labor with some caution. The early indications showed that job growth in the US could report slower numbers. This weighed on the currency on Thursday. The Treasury yields had also started to slow down. These slowing numbers helped to relieve some of the inflationary pressure and tension in the market at the start of the day. 

Analysts were expecting the headline number from the NFP report to slow to 325,000. This would have been significantly below the previous month’s number of 428,000. In fact, the numbers reported were higher than expected at 390,000. Still lower than the month prior, but the figures did push some back toward the USD.

Major Currencies Hold Firm Against Dollar

With the USD selling off slightly at forex brokers, the USD Index, a measure of the Dollar strength against a number of other major currencies, dipped back as much as it had in two weeks. That said, it remains in a strong position but has granted some breathing space to other major currencies. The Pound and the Euro have both performed steadily.

The EUR/USD traded above 1.075 early on Friday which was slightly up in the early hours though it moved lower on the release of employment data. Speeches from ECB policymakers followed the general narrative booting the Euro,  that the Central Bank needs to be more proactive in fighting inflation. The Pound also traded toward 1.26 before moving back as the country participates in celebrations of Queen Elizabeth over the weekend.

Choppy Stock Trading Continues

Thursday was a positive day on Wall Street. All three major indices broke a two-day negative run with solid gains to go into Friday higher. This moved the markets into positive territory for the week overall as the markets look to build on a similar positive week prior. 

Trading had been choppy through the week and this was demonstrated in Friday trading as all the major indices gave up gains from the previous day. The Dow Jones dropped back more than 1% while the S&P followed with a 1.6% decline. The biggest loser of the day though was the Nasdaq which dropped 2.5% to erase any positive momentum for the week.