The euro rebounded sharply against the dollar and broke through the 1.1200 mark, driven by a stronger dollar.

As the easing of trade frictions has boosted the dollar, it may be difficult for the pair to maintain its current posture.
President Trump's disclosure of a "major" trade deal with the UK, but the crucial 10% tariff remains unchanged, failed to get the markets fully excited. This situation has led to an atmosphere of caution among investors.

According to the latest labor market data, the number of Americans claiming unemployment benefits for the first time fell to 228000 in the week ending May 3. Although this figure is down from the unrevised 241000 in the previous week, it is slightly lower than market expectations, indicating a mixed employment situation.

The euro recovered some of the day's losses against the dollar during Friday's Asian trading session, hovering around the 1.1230. However, the euro weakened against the dollar, as the dollar gained support from positive U.S. economic indicators and the easing of international trade tensions.

The so-called "major" trade deal between the United States and Britain, with the crucial 10% tariff remaining in place, dampened initial enthusiasm in the market. At present, the market's attention has turned to the Sino US trade talks in Switzerland this weekend. Both sides expressed disoptimism about the possibility of a major breakthrough, which further exacerbated the uncertainty in the market.

Trump's stance on China remains tough, especially after the appointment of a new envoy to China. While discussions on potential tariff exemptions are ongoing, the administration appears hesitant. Trump said they "don't seek much immunity," underscoring his cautious approach.

From a data point of view, the drop in the number of initial jobless claims in the United States to 228000 is a noteworthy change. The seasonally adjusted insured unemployment rate was steady at 1.2 percent, but the four-week moving average edged up to 226000. In addition, the number of continuing claims for unemployment benefits fell by 29000 to 18.79 million in the week ended April 26, reflecting complex labor market conditions.
On the euro side, the single currency continues to face headwinds. Market expectations for further interest rate cuts by the European Central Bank are high, and there is speculation that a rate cut may be implemented as early as the June meeting. While ECB officials have expressed concern about the economic outlook for the eurozone, they remain confident that inflation will steadily rise back to the 2 per cent target by the end of the year, creating conflicting expectations for the future direction of the euro.