USD

The Dollar is rallying this morning after finding itself down against most of its major peers before the US jobs data release. Non-farm Payrolls surprised to the upside – showing an increase of 235K jobs versus the 165K expected. Average hourly earnings and the unemployment rate also came slightly better than expected. With employment data and the Fed in the rear-view mirror, next week's inflation and consumer sentiment numbers take center stage on the economic front. However, any headlines surrounding the US banking system woes or Washington's debt ceiling battle will also play a significant role in the short-term direction of the Greenback heading into next week. 

EUR

Eurozone retail sales came in well below expectations this morning, with March month-over-month sales falling 1.2% versus just a 0.1% decline. The bloc's biggest economy, Germany, particularly disappointed with a 2.4% decline as consensus forecasts pointed to a rise in sales by 0.4%. 

But retail sales weren't the only disappointment out of Germany, as factory orders badly missed expectations – plummeting 10.7% month-over-month in March. The March drop was the most significant decline in three years. Moreover, the Euro is now under pressure against the Dollar as an initial reaction to vital US jobs numbers pushed EUR/USD into the red for the second straight day.      

GBP

The Pound moved again this morning to make it 10 consecutive winning weeks. In the runup to US employment numbers, GBP/USD broke through to a one-year high as Sterling traders eagerly await next Thursday's Bank of England interest rate decision. With another 0.25% hike already priced in, the real intrigue for markets will be in the Bank's policy statement and Governor Bailey's press conference. If the BoE diverges from the Fed and ECB by remaining hawkish on rates, this will only fuel the Pound's impressive rally that has already seen it up over 4% for 2023.

JPY

JPY is down for the day as the Yen looks to hold on enough to register its first weekly gain in nearly a month. In the aftermath of US jobs data, USD/JPY trades almost 1% lower for the week. After a holiday-filled week that has kept much of the Japanese financial market on the sidelines, local traders will return next week to review the latest BoJ meeting minutes released Sunday at 7:50 pm EST, followed by March household spending data Monday at 7:30 pm EST. 

CAD

Like its American counterpart, Canadian jobs data beat expectations – adding 41.4K jobs versus 20K expected. USD/CAD will remain one of the pairs to watch today as markets digest the double dose of US and Canadian jobs data. The pair had been in freefall after the Federal Reserve's decision and broader Dollar weakness, with an additional boost from a bounce back in oil prices. However, the initial reaction to jobs data has not yet put a damper on the Loonie as it looks to close the week in the green for the first time since mid-April. Next week's calendar will be extremely light in Canada, with building permits and the solo release scheduled for Wednesday.  

MXN

The Mexican Peso is trading slightly in the green for the third consecutive session as it looks to have its first winning week since mid-April. The rebound of WTI prices above $70/barrel has helped support the Peso after a shaky start to the week. With Mexican financial markets closed today for Cinco de Mayo, the focus shifts to Tuesday's essential inflation data set. Consensus expectations are for a decline in 12-month inflation to 6.28% but an increase in both core and headline inflation to 0.64% and 0.67%, respectively. 

BRL

After a dismal start to the week, the Brazilian Real has erased much of its losses for the week heading into the Friday session. The reversal was sparked by a post-ECB rally in commodity prices yesterday, providing a broad boost to LATAM currencies. After yesterday's IPC Inflation reading for April showed a slight rise in inflation, BRL traders will go to next Friday's IPCA inflation release to see if the results differ. Current estimates show an expected 0.78% increase in inflation – a 0.08% rise from March.   

CNY

The Chinese Yuan is weaker against the US Dollar this morning post-jobs US data and yesterday's services data out of China, revealing a slower pace of economic recovery in China. The services PMI showed that China's service activity grew for the fourth consecutive month in April, although slower than in March. However, the unexpected contraction reported in the manufacturing PMI survey on Thursday and Sunday's official PMI figure suggests that China's recovery is doubtful. Looking ahead to next week, Chinese trade, foreign investment, and inflation numbers are set for release as the countdown to the PBoC's May 21st rate decision begins.