[MARKET ANALYSIS] DXY remains afloat after gaining on US data and with the NFP report on the horizon

DXY: +0.1%

• USD remains firmer after gaining yesterday as US data pointed to no imminent meltdown in the labour market, with the 4-week initial claims average hitting its lowest level since April 2024, while Revelio estimated growth of 71k jobs ahead of today's Non-Farm Payrolls report.

EUR/USD: Flat

• Languishes at the prior day's trough beneath the 1.1700 handle after giving up ground to the firmer buck, and with the single currency not helped by recent data releases from the bloc, which were ultimately mixed.

GBP/USD: -0.1%

• Lacks demand following the prior day's choppy performance with a mild downward bias, while there were reports that UK PM Starmer will exclude the City of London from his push for “closer alignment” with the EU, following lobbying by financial services firms against any return to Brussels rule.

USD/JPY: +0.2%

• Extended above the 157.00 level alongside a firmer dollar and the outperformance in Japanese stock markets.

Antipodeans: AUD/USD -0.1% / NZD/USD -0.1%

• Price action is little changed in the absence of data from both sides of the Tasman and as participants digest mixed Chinese inflation numbers.

The DXY's slight gain indicates a firmer USD as recent US labor market data shows resilience, alleviating concerns about an imminent downturn. With the Non-Farm Payrolls report looming, market participants are closely watching for any surprises that could further influence the dollar's strength against major currencies like the EUR and GBP, which are currently struggling to maintain momentum.