06:35 AM EDT, 06/07/2024 (MT Newswires) -- US dollar exchange rates ebbed in early European trade on Thursday after initial strength faded quickly with Asia-Pacific currencies outperforming going into the release of the latest non-farm payrolls report in the US.

The US dollar softened against all G10 peers except the Canadian, Australian and New Zealand dollars, while also falling against many G20 counterparts with losses deepest in relation to the Japanese yen, South African rand and Korean won.

Currencies like the yen, won and renminbi were the outperformers after China's trade surplus surged to $82 billion last month, from $72.35 billion, with exports growing faster than the increase in imports.

Gains for European currencies were limited, meanwhile, as major equity markets declined across the region and a widespread uptick in government bond yields offered little, if any support heading toward the North American open.

Attention now turns to the 8:30 am ET release of the latest non-farm payrolls report in the US, which is expected to show employment rising 185,000 in May, up from 175,000, with the unemployment rate holding steady at 3.9%.

A quick summary of foreign exchange activity heading into the European lunch hour and US open;

In Europe, EUR/USD was quoted 0.01% lower around 1.0890 after trading in a narrow range between 1.0882 and 1.0898 overnight. The single currency rose from session lows around 1.0882 after Eurostat confirmed that GDP rose 0.3% QoQ in the opening quarter, in line with expectations, and 0.4% YoY. The euro weakened previously when European Central Bank policymakers Gedimina Simkus and Olli Rehn suggested further interest rate cuts are likely in the months ahead. Attention now turns to a 10:15 am ET speech by ECB President Christine Lagarde.

Elsewhere in Europe, GBP/USD was quoted 0.03% higher around 1.2795 after trading in a narrow range between 1.2780 and 1.2802 overnight, with dips appearing to be bought at the lows near 1.2780. Sterling recovered off session lows around the London open and soon after the Halifax House Price Index reading of 1.5% YoY in May, ahead of expectations for a 1.2% increase. There is no meaningful data due out in the UK until next Tuesday's employment report.

In Asia, USD/JPY was quoted 0.13% lower around 155.48 after falling steadily from Thursday's highs around 156.44 throughout the Asia session overnight. The yen was the best-performing G10 currency after overlooking softer household spending and a decline in the leading economic index, while benefiting when export growth lifted China's trade surplus to $82 billion for May, from $72.35 billion previously. There is no data out in Japan until Monday's release of final GDP data for the opening quarter.

Back in North America, USD/CAD was quoted 0.10% higher around 1.3682 after rising from intraday lows around 1.3661 seen overnight in North American trade on Thursday and Asian trade on Friday. There was Canadian data released overnight but the Loonie will be sensitive to non-farm payrolls reports out on both sides of the border with the US at 8:30 am ET.