The Mexican Peso recovers some ground versus the US Dollar, gaining 0.50%, but it remains poised to end the week with a 3% loss as investors exit the “carry trade” amid a narrowing of the interest rate differential between the US and Mexico to its lowest level since 2015.

NZD/USD advances on Friday and trades around 0.5610 at the time of writing, up 0.12% on the day. The New Zealand Dollar (NZD) benefits mainly from the decline in the US Dollar (USD), which comes under pressure following a significantly weaker-than-expected employment report.

The Pound Sterling rises by over 0.41% against the US Dollar on Friday, as the US Unemployment Rate rises following a worse-than-expected Nonfarm Payrolls report for September. The GBP/USD trades at 1.3250 after bouncing off daily lows beneath 1.3200.

USD/JPY trades around 157.65 on Friday at the time of writing, down 0.28% on the day. The pair briefly dropped to 156.95 following the release of the United States (US) employment report before erasing the entire move and returning to pre-release levels.

EUR/USD rebounds to around 1.1260 on Friday, gaining 0.16% on the day at the time of writing, after hitting an intraday low of 1.1221 earlier in the day.

The Australian Dollar (AUD) is 0.17% higher at around 0.6640 against the US Dollar (USD) during the European trading session on Friday. The Aussie pair gains as the Australian Dollar rises despite experts doubting about more Reserve Bank of Australia (RBA) interest rate hikes.

The Swiss Franc (CHF) is emerging as a safe haven amid the global government bonds sell-off, showing a surprising comeback against an otherwise firm US Dollar (USD) this week, as Switzerland's sound fiscal position stands out with government debt escalating amid the world's leading economies.

Brown Brothers Harriman’s Elias Haddad reports EUR/USD has slightly recovered after hitting fresh cyclical lows, with support at 1.1200 and 1.1111.

The Euro (EUR) trades lower against its major currency peers due to mounting fiscal worries in France. In the European trade, the major currency is down 0.35% at around 177.00 against the Japanese Yen (JPY).

MUFG’s Derek Halpenny notes that rising rates volatility is driving a broader unwind of EM FX carry trades, with LatAm currencies under particular pressure. USD/MXN has surged and MXN long leveraged positions are being squeezed as implied volatility jumps.

The Euro (EUR) is practically flat against the US Dollar (USD) on Friday, with the EUR/USD pair trading at the mid-1.1200s, still close to the 16-month low of 1.1210 hit on Thursday.

ING’s Chris Turner argues that the French debt sell-off has broken the narrative of ever-higher short-term rates and raised doubts about further European Central Bank (ECB) tightening.

Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) data for September arrives at 3.8% Year-on-Year (YoY), higher than 3.6% estimates and August’s final reading reading of 3.2%. On a monthly basis, inflationary pressures grew at a faster pace of 0.6% against the prior release of 0.4%.

Eurozone Harmonized Index of Consumer Prices (MoM) above expectations (0%) in September: Actual (0.6%)

The Japanese Yen (JPY) trades higher against the US Dollar (USD) ahead of the United States (US) Nonfarm Payrolls (NFP) data for September, which will be published at 12:30 GMT.

The British Pound (GBP) shows marginal gains against the US Dollar (USD) on Friday, with the GBP/USD pair trading just above 1.3200, yet unable to take any significant distance from the four-week lows at 1.3180 hit on Thursday.

The Australian Dollar (AUD) turns flat at around 109.50 against the Japanese Yen (JPY) during the European trading session on Friday after recovering early losses.

Deutsche Bank analysts describe EUR/USD weakness as European spreads widened and bank stocks sold off. The Euro fell sharply against the Dollar, while markets questioned whether the European Central Bank could deliver another rate hike this year.

Commerzbank’s Michael Pfister and Volkmar Baur highlight that the Japanese Yen is struggling as a safe haven despite risk-off conditions. Rising Japanese debt concerns and the Bank of Japan’s (BoJ) rate hikes are seen eroding its traditional crisis appeal.

Here is what you need to know on Friday, October 2:

The British Pound (GBP) consolidates against the Japanese Yen (JPY), which is outperforming its currency peers on Friday. At press time, GBP/JPY is flat at around 208.55.

The AUD/USD pair gathers strength to around 0.6940 during the early European trading hours on Friday. Markets might turn cautious later in the day ahead of the key US economic data and escalating conflicts in the Middle East.

The NZD/USD pair recovers some lost ground to near 0.5610, snapping the three-day losing streak during the early European session on Friday.

USD/CAD loses ground for the second successive day, trading around 1.4210 during Asian hours on Friday. The technical analysis of the daily chart indicates that the price is positioned slightly below the top trendline of an ascending channel, suggesting a persistent bullish bias.

The Euro (EUR) finds temporary support against the US Dollar (USD) on Friday after a four-day losing streak, in which it hits a fresh yearly low at 1.1215. In Asian trade, EUR/USD is up 0.1% to near 1.1253 due to a marginal correction in the US Dollar.

USD/CHF extends its losses for the second consecutive day, trading around 0.8290 during Asian hours on Friday.

The USD/JPY pair edges lower during the Asian session on Friday, currently trading below the 158.00 mark, though it remains near the weekly high touched the previous day.

The British Pound (GBP) trades 0.1% higher at around 1.3208 against the US Dollar (USD) during the Asian trading session on Friday. The GBP/USD pair as the US Dollar Index trades slightly lower to near 101.93 after posting a fresh over-a-year high at 102.20 on Thursday.

The Euro (EUR) trades flat against the Japanese Yen (JPY) at around 177.60 during the Asian trading session on Friday, but the pair is close to its fresh over 10-month low of 176.66 posted the previous day.

AUD/USD remains subdued for the fifth consecutive day, trading around 0.6930 during the Asian hours on Friday.