The Bureau of Labor Statistics will release the March Nonfarm Payrolls (NFP) report on Friday at 12:30 GMT. This report is expected to show a slight improvement in job growth following the sharp drop in February. Most forecasts suggest payrolls will rise by about 60,000, with the unemployment rate steady at 4.4% and wage growth easing slightly to 3.7% year-on-year.

Some analysts have a more cautious outlook. TD Securities and Danske Bank predict payroll gains closer to 30,000 and see a chance unemployment might rise. Recent data points support this cautious view: ADP reported a 62,000 increase in private-sector jobs, reflecting steady but limited hiring, while the Institute for Supply Management’s manufacturing employment index remains in contraction, indicating ongoing weakness in that area.

The Federal Reserve is currently in a wait-and-see mode. Jerome Powell mentioned that job growth is slowing and the labor market is becoming more difficult to enter. As a result, markets expect the Fed to hold interest rates steady for a while, with little chance of cuts in the near term.

How the US Dollar reacts will likely depend on the report’s surprises. If the NFP number beats expectations, especially above 70,000, it could boost the dollar by reviving hopes for tighter policy. Conversely, a weak figure below 50,000, particularly if unemployment rises, might weigh on the dollar and push EUR/USD higher.

Still, the overall market trend remains heavily affected by geopolitical tensions and rising oil prices. Even if the NFP numbers come in weak, EUR/USD might have trouble holding gains unless risk sentiment improves more broadly.
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