Forex Today: Markets await NFP, try to look away from Trump-Musk drama

Here is what you need to know on Friday, June 6:

Financial markets remain relatively quiet early Friday as investors move to the sidelines ahead of the highly-anticipated May employment report from the US, which will feature Nonfarm Payrolls, Unemployment Rate and wage inflation figures. Earlier in the day, the European economic calendar will offer revisions to first quarter Gross Domestic Product (GDP) and Employment Change data, alongside Retail Sales figures for April.

The European Central Bank (ECB) announced on Thursday that it cut key rates by 25 basis points after the June policy meeting, as expected. In the post-meeting press conference, ECB President Christine Lagarde reiterated that they are confident that inflation will stabilize at their target level noted that they were getting to the end of the current monetary policy cycle. EUR/USD gained traction with the immediate reaction to Lagarde's comments and reached its highest level since late April near 1.1500. Although the pair corrected lower later in the American session, it ended the second consecutive day in positive territory. Early Friday, EUR/USD trades in a narrow channel below 1.1450.

The US Dollar (USD) came under renewed selling pressure following the disappointing Jobless Claims data on Thursday, which showed that the number of first-time applications for unemployment benefits rose to 247,000 from 239,000. Meanwhile, news of United States (US) President Donald Trump holding a phone call with Chinese President Xi Jinping to discuss trade helped the risk mood improve and limited the USD's losses.

Later in the American session, markets turned risk-averse as President Donald Trump and Tesla CEO Elon Musk got into a heated argument. Trump said that the easiest way to save money in the budget would be to terminate Musk's governmental subsidies and contracts. In response, Musk said that SpaceX will decommission its Dragon spacecraft, which is used to transport crews to and from the space station, immediately. When asked by a user whether he thinks that Trump should be impeached, Musk replied, "Yes." Tesla Inc stocks fell nearly 15% following this development and the tech-heavy Nasdaq Composite ended the day with a 0.8% loss. Early Friday, US stock index futures trade marginally higher on the day and the USD Index holds steady slightly below 99.00. Nonfarm Payrolls in the US are expected to rise by 130,000.

USD/CAD dropped to a fresh 2025-low below 1.3650 on Thursday before erasing its losses to close flat. In the European morning on Friday, the pair holds steady above 1.3670. Statistics Canada will publish employment data for May later in the day.

After reaching its strongest level since February 2022 above 1.3600 on Thursday, GBP/USD lost its traction. At the time of press, the pair was trading in negative territory at around 1.3550.

USD/JPY continues to stretch higher and trades near 144.00 after posting modest gains on Thursday.

Gold benefited from the broad-based USD weakness in the first half of the day on Thursday and climbed above $3,400. Growing optimism about improving US-China trade relations, however, weighed on XAU/USD. After losing about 0.6% on Thursday, XAU/USD stays in a consolidation phase above $3,350 in the European morning on Friday.