Forex Today: Late-week holiday gives way to another NFP Friday

US market flows were hobbled on Thursday, tripping up trade volumes as the calendar rounds the corner into another US Nonfarm Payrolls (NFP) Friday.

Here's what you need to know heading into Friday, December 10:

The US Dollar Index (DXY) stepped tentatively higher on Thursday, driven by an overall tepid market outlook with American markets shuttered in a day of mourning in observance of the passing of former President Jimmy Carter, who passed away in December at the age of 100. Maretk participants got a reprieve from the week's hectic US data release schedule, but another round of Friday NFP jobs figures are looming ahead, further constraining already-tight market volumes. US jobs additions are expected to ease slightly in December, while wage growth is forecast to hold on the flat side, and even ease in the monthly figures. Beats in wage and jobs growth could spell further chaos for broad-market rate cut hopes looking forward into 2025, as high wages keep infaltion expectations on the high end and still-strong employment figures mean the Federal Reserve (Fed) will have little reason to move policy rates.

EUR/USD continued to grind through chart paper near the 1.0300 handle on Thursday, sending the Euro into a third straight day of tepid losses as markets coil ahead of US jobs figures. Pan-European Retail Sales figures came in well below expectations in November, further crimping bullish potential in the Euro.

GBP/USD likewise dumped into fresh 14-month lows, driven further into the basement after UK Like-For-Like Retail Sales fell much steeper than expected in December, contracting by a full percent MoM and flubbing the median market forecast for a mild recovery, though the figure was always expected to remain in contraction territory.

AUD/USD continues to churn near the 0.6200 handle. Australian Retail Sales rebounded in November, climbing to 0.8% MoM, but still coming in below the forecast 1.0% increase. Further taking wind out of Aussie sales werte Chinese Consumer Price Index (CPI) inflation figures for December, which perfectly met expectations, as managed data almost always tends to do, but still easing to a scant 0.1% YoY as the Chinese economic engine sputters and wide market expectations of rising Chinese consumption demand fail to materialize.