Forex Today: July Nonfarm Payrolls data to keep volatility high heading into weekend

Here is what you need to know on Friday, August 1:

Markets turn quiet early Friday as investors assess the latest headlines surrounding the United States' (US) trade regime, while gearing up for the July employment report, which will feature Nonfarm Payrolls, Unemployment Rate and wage inflation figures. The European economic calendar will offer Eurozone inflation data and later in the day the ISM will publish the US Manufacturing PMI report for July.

The US Dollar (USD) Index continued to stretch higher following Wednesday's impressive rally and registered gains for the sixth consecutive day. The index is up nearly 2.5% this week and remains on track to register its biggest one-week gains since September 2022. The White House announced late Thursday that the US will set a baseline tariff rate of 10%. Meanwhile, US President Donald Trump signed an Executive Order increasing the tariff rate on Canadian imports from 25% to 35%, while extending the current trade agreement with Mexico for 90 days. The USD Index stays in a consolidation phase at around 100.00 in the European morning and US stock index futures lose between 0.3% and 0.4%. Nonfarm Payrolls in the US are forecast to increase by 110,000 in July.

Canada's Prime Minister Mark Carney said they are disappointed with the US on the fresh tariff rate. "While negotiations continue with the US, Canada is focused on what we can control; that is on the Building Canada Strong campaign," he added. USD/CAD stretches higher early Friday and trades at its strongest level since late May above 1.3860.

Following a sharp decline that lasted for three days, EUR/USD found a foothold on Thursday and closed the day virtually unchanged. The pair stays in a consolidation phase above 1.1400 in the European morning.

GBP/USD extended its weekly slide on Thursday and ended the day in negative territory. The pair struggles to gather recovery momentum early Friday and fluctuates at around 1.3200.

USD/JPY rose nearly 1% on Thursday and climbed above 150.00 for the first time since early April. The pair stays relatively quiet in the European session and trades near 150.50. Japanese Finance Minister Katsunobu Kato on Friday alarmed over the foreign exchange (FX) moves, including those driven by speculators. Kato further stated that he will need to closely monitor impact on US tariffs on exports.

Gold failed to gather bullish momentum after rising above $3,300 and ended the day marginally higher on Thursday. XAU/USD moves sideways at around $3,290 on Friday.