Assessing the Dollar's Rebound: Will Attention Turn to U.S. Employment Data?

Assessing the Dollar's Rebound: Will Attention Turn to U.S. Employment Data?

07.05.2026

In the U.S. currency market the previous day, although the April ADP employment report showed an increase of 109,000—marking stronger growth than the previous month—the U.S. dollar traded weakly against major currencies as risk appetite strengthened amid hopes for a ceasefire between the U.S. and Iran.The USD/JPY pair briefly plummeted from around 157.80 to near 155.00, and has since been trading in the low 156-yen range, with market participants continuing to monitor speculation regarding potential currency intervention by Japanese authorities.Currently, the 157.00 level appears to be a key resistance level for a rebound, while the focus on the downside will likely be on whether the 155.00 level holds as support. We will be watching today’s U.S. initial jobless claims data to see if the U.S. dollar can find a bottom.

European currencies saw the pound hold steady against the dollar after the UK’s April Services Purchasing Managers’ Index (PMI, revised) rose to 52.7 from 50.5 in March.On the other hand, cost pressures on businesses are intensifying amid rising fuel and labor costs, and caution remains regarding the Bank of England’s policy decisions. After rising to around 1.3600, the GBP/USD pair is now at a level where resistance is likely to be felt.On the upside, the 1.3600 to 1.3620 range is likely to be a key level, while on the downside, the mid-1.3500s are likely to be a key level. We will be watching to see if the pound’s resilience continues following today’s UK Construction PMI release.

Today’s economic indicators include Germany’s March manufacturing new orders at 15:00, France’s March trade balance and current account balance at 15:45, Switzerland’s April unemployment rate at 16:00, the UK’s April construction Purchasing Managers’ Index (PMI) at 17:30,Eurozone March Retail Sales at 18:00, U.S. Initial Jobless Claims for the previous week at 21:30, Q1 Nonfarm Labor Productivity, Q1 Unit Labor Costs, and U.S. March Construction Spending at 23:00.In particular, during European trading hours, the UK Construction PMI and Eurozone retail sales are likely to be key drivers, while during New York trading hours, U.S. employment-related indicators will likely be key drivers; we will carefully monitor the reactions of the pound, the euro, and the U.S. dollar.