Daily Currency Update

USD - US Dollar

The subdued reaction of the dollar to a slight increase in U.S. jobless claims highlights market indecision and the dollar's vulnerability to softer U.S. data. A softer jobs market narrative is gaining traction. However, significant and lasting impacts on the dollar will likely hinge on inflation, with core CPI still too high for imminent rate cuts by the Fed. Today, focus is on the University of Michigan surveys and Fed commentary, including Neel Kashkari's views on a higher neutral rate, suggesting current policy might be less restrictive than thought.

CAD - Canadian Dollar

Canada is set to release its April jobs report today, with projections indicating a moderate gain of 20,000 jobs and a slight increase in unemployment from 6.1% to 6.2%. Given recent signs of a slowing labor market, there are potential risks of a weaker outcome. A disappointing report would support the likelihood of a rate cut by the Bank of Canada in June, which we currently anticipate.  Observe the USD/CAD exchange 

EUR - Euro

EUR/USD rose yesterday, but a significant rise above 1.0800/1.0850 is unlikely before the release of US inflation data, with trade within the 1.0700/1.0800 range expected. Today's focus is on the ECB's April meeting minutes, which might suggest a June rate cut. EUR/USD's trends will primarily shaped by US developments, keeping our short-term outlook neutral.