Sterling remains near two-week highs, NFP report in focus

On Friday, European stocks are expected to rise as investors wait for the release of UK PMIs and the final US employment report. The markets appear to be running short USD positions on today's non-farm payrolls.

Asian markets ended the week on mixed data

Asia provided traders with mixed news earlier in the session. According to data, Japan's economy likely grew faster than initially reported in the second quarter, helping the Nikkei gain 2%. The revised GDP reading is expected to rise to 1.6% in Q2, up from a preliminary reading of 1.3% growth.

The Chinese stock market was held back by a contraction in the country's services sector, with the Caixin services PMI dropping to 46.7 in August, the lowest reading since April 2020.

The dollar index hovers near one month low

The dollar dropped to its lowest level in nearly a month against major rivals, pushing up the euro and the pound. GBPUSD in a 4-hour time frame is trading in a 10-day uptrend above WMA 34. The break above the swing high at 1.38068 triggered a bullish signal encouraging buyers to keep their eyes on the three-week high at 1.38866. Even if the bullish momentum eases ahead of PMI data, the uptrend remains intact as long as it maintains above the trendline.

Non-farm Payrolls in focus

US non-farm payroll numbers will be published at 12:30 GMT today, with the number of jobs likely to have slowed considerably in August to 750,000, down from 943,000 in July. Investors are becoming more cautious after the disappointing ADP Employment report, while the ISM manufacturing employment sub-index dropped into contraction territory. An increase above expectations would likely spawn speculation about a Fed taper. At the same time, a significant decline would probably force the Fed to defer a taper until employment data improved.

Also, US ISM Non-Manufacturing PMI releases at 17:00 GMT, which is expected to perform above 61 levels.