• All eyes are on the US jobs report later this week.

• No USD trades settling today due to the Labor Day holiday.

USD Sees Volatility on Friday

The US Dollar experienced a day of mixed performance on Friday. After an early morning climb, the currency retreated as the market closed, with month-end trading activity playing a key role. The release of the Core PCE inflation data, a key measure watched by the Federal Reserve, came in exactly as anticipated, offering no surprises to the market.

Pound Closes the Week Weaker

The British Pound Sterling faced a steady decline throughout Friday’s session. The currency’s sell-off was linked to a broader downturn in risk appetite across the markets, ultimately leading the GBP to end the week on a weaker note.

Key US Economic Drivers

The US Dollar is facing a weaker start to the day, following a significant ruling from a US Court of Appeals. The court deemed President Donald Trump’s global tariffs as illegal, although the levies will remain in place while the case moves forward.

Looking ahead, the main event for the USD will be Friday’s US jobs report, which is garnering more attention than usual after August saw a downward revision. Additional market focus will be on the ISM manufacturing data and the latest Federal Reserve Beige Book.

Eurozone Inflation in the Spotlight

Meanwhile, all eyes are on the Eurozone as it releases its latest CPI numbers. Given that the markets have already priced out any further interest rate cuts from the European Central Bank (ECB) this year, a downside surprise in the inflation data would be a key market catalyst.

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