The US dollar remains stable, with sterling as the only G10 currency showing gains today, rebounding from its previous losses. UK political tensions have eased following Prime Minister Starmer’s open support for Chancellor Reeves. Most final June PMI figures were revised upwards, signaling slight economic resilience. The US finalized a trade pact with Vietnam to curb re-exports of Chinese goods, while export rules on chip design software to China were relaxed—suggesting US satisfaction with resumed rare earth and magnet shipments. Meanwhile, gold saw a brief rally before pulling back, and oil is consolidating after a strong surge.

Asia Pacific Markets

The Australian and Japanese markets showed diverging trends. The Australian dollar dipped to $0.6540 before recovering toward $0.6590, although it remains under mild selling pressure. Revised June PMI data showed modest improvements, but Australia’s trade surplus narrowed significantly due to falling exports and rising imports. In Japan, the yen traded within a narrow band despite fluctuations in US Treasury yields. Japan’s PMI reached its highest since February, though growth remains sluggish. The economy barely moved in Q1 and Q2 expectations remain subdued. US tariffs, especially on autos, pose a serious threat to Japan’s recovery outlook.

European Markets

The euro declined to just under $1.1750 before recovering back to the $1.1800 mark. It registered its first daily loss since mid-June. Final June PMI readings in the eurozone were revised higher, particularly in services, bringing the composite to 50.6. However, growth remains tepid, and producer prices are expected to decline for a third straight month. In the UK, political drama pressured sterling, which rebounded after Prime Minister Starmer endorsed Chancellor Reeves. Sterling briefly dropped below its 20-day moving average but has since climbed back to $1.3675. Revised UK PMI figures showed improvement, though the economy appears to be losing momentum in Q2.

American Markets

Despite a weaker-than-expected ADP employment report, the Dollar Index reached a session high before retreating modestly. It continues to trade in a tight range ahead of key US job data. While two Fed officials expressed openness to a rate cut, markets remain doubtful, pricing in just a 25% chance of a cut this month. Recent dollar strength attracted fresh selling interest. Attention now turns to today’s employment figures, which are forecasted to show slowing job growth and a higher unemployment rate. Additional reports due include jobless claims, factory orders, and final PMI readings, all ahead of tomorrow’s holiday.