US Payrolls Report Looms Large Over FX Markets

Today's FX market is in a wait-and-see mode ahead of tomorrow's US payrolls report, which could limit FX moves. The greenback remains supported by stable Fed rate expectations, but improved sentiment in the Gulf has lent some weakness to the dollar.

The US-Iran negotiations have kept markets in risk-on mode, favouring a rotation from the dollar to higher-beta currencies. However, the proximity of the payrolls report has kept volatility contained and the dollar broadly range-bound.

In Sweden, hotter core inflation was reported this morning, but it's not enough to change the call for no hikes this year. The Riksbank's forward guidance is expected to be less hawkish than market pricing at its meeting today.