Forex Today: US Dollar selloff pauses ahead of NFP, Powell speech

Here is what you need to know on Friday, April 4:

After suffering large losses against its peers on Thursday, the US Dollar (USD) holds its ground early Friday as investors move to the sidelines ahead of key events. The US Bureau of Labor Statistics will publish March employment data, which will feature Nonfarm Payrolls, Unemployment Rate and wage inflation figures. Later in the session, Federal Reserve Chairman Jerome Powell will be delivering a speech.

The USD Index fell more than 1.5% on Thursday as US President Donald Trump's tariff announcements revived fears over a stagflation in the US economy. Wall Street's main indexes declined sharply as well. The Nasdaq Composite registered its largest one day loss in about 5 years, with a nearly-6% decline, the S&P 500 dropped 4.8% and the Dow Jones Industrial Average fell 4%. US stock index futures were last seen losing between 0.6% and 0.3%.

The International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Thursday that sweeping tariffs announced by the Trump administration represent a significant risk to the global economy at a time when growth has been sluggish. In the meantime, Fitch Ratings said that the US growth in 2025 is likely to be slower than the 1.7% that they had projected in March, given higher-than-anticipated tariffs. "Tariff hikes will result in higher consumer prices and lower corporate profits in the US," the agency noted.

Nonfarm Payrolls in the US are forecast to rise by 135,000 in March, following the 151,000 increase reported in February. In this period, the Unemployment Rate is forecast to hold steady at 4.1%. Fed Chairman Powell will deliver his prepared remarks on the economic outlook and join a moderated discussion at the annual conference for the Society for Advancing Business Editing and Writing in Arlington, Va.

EUR/USD climbed to its highest level in six months above 1.1100 on Thursday. The pair corrects lower and trades at around 1.1050 in the European morning on Friday.

GBP/USD surged above 1.3200 but erased a portion of its daily gains in the second half of the day on Thursday. The pair turns south to begin the European session and trades below 1.3050.

Bank of Japan Governor Kazuo Ueda said early Friday that US tariffs are likely to exert downward pressure on Japan and the global economies. USD/JPY stays in a consolidation phase slightly above 146.00 after falling more than 2% on Thursday.

Gold fluctuated in a wide range on Thursday and ended the day in negative territory. Following an impressive rally to a new record-high of $3,167 during the Asian session, XAU/USD dropped all the way to $3,054 before closing above $3,110. The pair stays on the back foot and trades below $3,100 in the European morning.