FX Today: GBP lifted by longer Brexit extension proposal; German data, US NFP eyed

Forex today cheered a better risk environment induced by the reports that the US and China reached a consensus on the trade text and renewed Brexit optimism, although markets remained slightly unnerved heading into the crucial US payrolls release due later today.

Amongst the G10 currencies, the GBP/USD pair caught a fresh bid wave and regained the 1.31 handle following the reports that the European Council President Tusk is proposing to offer a 12-month Brexit extension to the UK while fears of a Hard Brexit recede as the UK political parties strive for concerted efforts on May’s deal.

The Aussie continued its struggle to surpass the 0.7130 barrier amid mixed Asian equities and negative oil prices while the Kiwi kept its range trade intact around 0.6750 levels. The USD/JPY pair reached fresh 3-week tops at 111.80 amid firmer Treasury yields and positive US equity futures but the bulls take a breather, in response to the flat action seen around the US dollar. The EUR/USD pair stuck to the recovery gains near 1.1230 region, as markets await the German industrial figures for fresh impetus. Meanwhile, gold prices on Comex traded on the back foot below 1295 levels.

Key Focus Ahead

The main event risk this Friday remains the US non-farm payrolls data due at 1230 GMT, with 180k job additions expected in the US economy for the month of March. The data is likely to have a strong bearing on the Fed’s rate hike outlook in the coming months. At the same time, the Canadian employment data will be also reported, offering fresh impetus to the CAD traders.

Meanwhile, the EUR docket remains light, with the only German industrial production release of note that will drop in at 0600 GMT among other few minority reports later on.

When is the German industrial production and how could it affect EUR/USD?

Germany, Eurozone’s economic power-house, will publish its industrial production figures for the month of February at 0600 GMT today. A negative surprise in the German industrial figures would intensify these fears, knocking-off the EUR/USD pair to 2019 lows of 1.1177.

GBP/USD: Buyers cheer Brexit progress ahead of US employment data

Theresa May’s ability to join hands with the opposition seems to deliver soft Brexit and please the Pound buyers. The US NFP report could gain market attention as the GBP/USD pair trades between 200-day and 50-day SMA.

Non-Farm Payrolls Preview: Jobs, claims and sentiment

Non-farm payrolls are predicted to add 180,000 workers in March, following February’s 20,000. Manufacturing employment will rise by 10,000, up from 4,000 in February. 

Canadian jobs preview: The bar for the C$ to rally is quite low

Canada publishes its labor market report for March on April 5th, at 12:30 GMT. The nation enjoyed a winning streak of surprisingly strong jobs reports. In February, employment rose by 55.9K and in January 66.8K, far above expectations.