The euro is slightly higher against the dollar in early Asian trading, recovering from the strong bearish move seen the day before. The pair is testing support near 1.1590 after largely ignoring robust eurozone industrial output (up 3.7% y/y vs 2.9% forecast). Today, Italian CPI for June (expected steady at 0.2% m/m, 1.7% y/y) is unlikely to move markets, while eurozone trade balance data (expected surplus of €13.0B vs prior €9.9B) and the monthly Bundesbank report may clarify the outlook for the single currency. US PPI figures at 14:30 (GMT+2) will be closely watched; forecasts call for a slight deceleration to 2.5% y/y (core PPI to fall to 2.7%). Markets have largely priced in an end to ECB rate cuts for 2025, with perhaps one more move possible this year.

GBP/USD: Pound Under Pressure as UK Inflation Rises

GBP/USD is consolidating near recent lows after UK inflation data showed annual core CPI accelerating to 3.7% in June (headline CPI at 3.6% y/y, 0.3% m/m). Rising inflation could delay the Bank of England’s plans for monetary easing. US data released yesterday showed core CPI at 2.9% y/y (vs 3.0% forecast) and 0.2% m/m (vs 0.3%). The Fed is expected to keep rates unchanged in July, with September still eyed for potential cuts. Thursday brings UK labor market data and US weekly jobless claims plus June retail sales.

AUD/USD: Aussie Rebounds, But China and US Risks Linger

AUD/USD is rising toward 0.6530, recovering from earlier-week lows, as US inflation data continues to weigh on markets. Yesterday’s US CPI was slightly below expectations, but China’s Q2 GDP slowdown (5.2% y/y vs 5.4% prior) and trade policy uncertainty from Washington limit risk appetite. Trump’s tariff threats remain in focus, with a new implementation date of August 1 and potential for further increases if trade partners retaliate. Australia’s June labor report is due tomorrow, expected to show a 20,000 rise in employment with unemployment steady at 4.1%.

USD/JPY: Dollar Rallies Toward 149 on Stronger Data

USD/JPY is once again testing the 149.00 barrier, reaching new highs since early April. Recent US inflation and New York Fed manufacturing data (Empire State index jumped to 5.5) have strengthened the dollar’s appeal. Today’s focus is on US PPI and the Fed’s Beige Book (20:00 GMT+2). Japan’s June trade balance and Friday’s CPI will be key for yen sentiment, with expectations for national core CPI to slow to 3.3%. Any signs of slowing Japanese inflation could complicate the BOJ’s tightening path.

XAU/USD: Gold Firms as Market Awaits US Data and Trade News

Gold is regaining ground, testing the $3340 level after early-week weakness. The market digests mixed US inflation signals (core CPI at 2.9% y/y, headline at 2.7%) and remains wary of ongoing US tariff policy. Notably, Trump has threatened 100% tariffs on energy trade with Russia, though markets are skeptical about their implementation—especially given China’s potential inclusion in such measures.