Forex Today: Dollar comes back with bad intentions, eyes on NFP

The benchmark 10-year US Treasury bond yield rose more than 3% and the S&P 500 fell 3.6%. April Nonfarm Payrolls data from the US, which is expected to come in at 391,000, will be the last significant data release of the week. Market participants will pay close attention to speeches by Bank of England (BOE) and Fed policymakers throughout the day as well. Finally, the Canadian employment report will be looked upon for fresh catalysts.

Nonfarm Payrolls Preview: Could employment become a new headache for the Fed？

The Bank of England (BOE) announced on Thursday that it hiked the policy rate by 25 basis points (bps) to 1% as expected. Although the policy statement revealed that three Monetary Policy Committee members voted for a 50 bps rate hike, the British pound came under heavy bearish pressure. The BOE warned that the UK economy could go into recession and Governor Andrew Bailey noted that there was a “very sharp slowdown” in activity. Finally, the bank clarified that it will work on a plan to start selling the government bonds that it has purchased since the beginning of the crisis and unveil it in August.

EUR/USD erased all the gains it recorded on Wednesday and was last seen testing 1.0500. European Central Bank Governing Council Member Olli Rehn argued on Thursday that the policy rate could reach zero in Autumn with the first rate hike coming in July. Nevertheless, these comments failed to help the shared currency find demand.

GBP/USD is trading at its lowest level since June 2020 at around 1.2300 early Friday. The pair is down more than 250 pips on a weekly basis.

USD/JPY regained its traction on surging US Treasury bond yields and snapped a two-day losing streak on Thursday. The pair was last seen posting modest daily gains near 130.50.

Gold jumped above $1,900 on Thursday but made a sharp U-turn in the second half of the day to close deep in negative territory. XAU/USD is staying relatively quiet near $1,870 in the European morning.

US April Nonfarm Payrolls Preview: Analyzing gold's reaction to NFP surprises.

Bitcoin fell nearly 8% on Thursday amid risk aversion and went into a consolidation phase near $36,300. Ethereum lost 6.5% and was last seen moving sideways at around $2,700.