US Dollar falls modestly following a risk-on move overnight.

The US Dollar (USD) edged lower on Thursday as markets prepared for the European Central Bank’s (ECB) policy decision. The ECB is likely to decrease interest rates for the first time since its post-pandemic hike cycle began to control inflation. With traders looking for signs as to what this could imply for the US, the Federal Reserve (Fed). And the Greenback. Normally, a rate drop would signal devaluation for the local currency, in this case, the Euro, but a ‘one-and-done’ message may form a knee. jerk reaction in the markets could be seen as extremely hawkish.

Markets will be focusing on US data and the ECB’s rate decision.

Aside from the ECB meeting, weekly US jobless claims are under focus ahead of Friday’s Nonfarm Payrolls figure. Traders are having difficulty understanding statistics from the United States. That hint to conflicting conclusions after robust Services Purchasing Managers Index figures (PMI) on Wednesday defied the disappointing Manufacturing data reported on Monday. The Challenger Job Cuts report for May may give light on how labor demand is holding up.

Daily Market movers: All eyes on Lagarde.The US Dollar Index remained over 104.00 after reducing gains.

The Challenger Job Cuts report for May, which will be released at 11:30 GMT. kicks off the data releases. The prior figure was 64,789 layoffs.
Moreover At 12:15 GMT, the European Central Bank releases. The ECB’s official rate decision and joint statement are expected to result in a 25-basis-point rate cut from 4% to 3.75% for the Deposit Facility rate. At 12:30 GMT, nearly all US data points for Thursday will be released, including Initial Jobless Claims (expected to increase to 220,000 from 219,000) and Continuing Claims (expected to decrease to 1,790,000 from 1,791,000). The Goods Trade Balance posted a deficit of $99.4 billion. Furthermore Accelerate to 4.9% from 4.7%.
Moreover At 12:45 GMT, ECB President Christine Lagarde will speak on the rate decision. New growth and inflation predictions will also be provided.

Equities are trading in a positive tone after taking over the risk on atmosphere.

Equities are trading in a positive tone after taking over the risk-on atmosphere from the US at Wednesday’s closing bell.
According to the CME Fedwatch Tool, Fed Fund futures pricing data indicates. A 31.4% possibility of keeping rates constant in September, compared to a 56.8% chance of a 25 basis point (bps) rate cut and an 11.3% chance of a 50 bps rate cut. Interest rate increases are no longer considered an option. Futures contracts for the forthcoming meeting on June 12 completely price rates remaining at present levels.
Moreover The benchmark 10 year US Treasury Note trades around 4.3%. Close to the fresh monthly low from Wednesday at 4.27%.