GBP/USD: Sterling trades mixed around 1.3677, on track for a modest weekly decline. Wednesday’s sell-off followed a limited reaction to the strong US jobs report, which reignited dollar demand. While UK services PMI for June jumped from 50.9 to 52.8—well ahead of forecasts—the labor market theme dominates. Construction PMI (due 10:30 GMT+2) is expected to rise from 47.9 to 48.6. Composite PMI printed at 52.0 versus a forecast of 50.7, marking the fastest expansion since August 2023, though price pressures in services slowed to their lowest pace since February 2021. Fed Chair Jerome Powell’s stance for “no hasty policy easing” has solidified after this week’s jobs data, with only 4.7% of traders now pricing a rate cut at the July FOMC.
AUD/USD: The Australian dollar is trading sideways near its November highs at 0.6572, ending the week with modest gains despite losing bullish momentum after the latest US jobs release. The creation of 147,000 new jobs in the US, far exceeding expectations, helped the dollar regain ground. Australia's trade balance disappointed: exports fell 2.7% (prior: -1.7%), while imports rose 3.8% (prior: 1.6%), shrinking the trade surplus from AUD 4.859B to AUD 2.238B versus a forecast for growth. The slowdown reflects both US tariff policy and uncertainty over China’s economic outlook—a crucial trading partner for Australia.
USD/JPY: The US dollar is drifting lower against the yen, trading at 144.35 and poised to close the week marginally higher. Early in the week, bears led the market; momentum shifted after strong US labor data. Meanwhile, Japan’s services PMI for June climbed to 51.7 (vs. 51.5 expected), with the composite index rising to 51.7 as well. These readings support the Bank of Japan’s hawkish outlook, but uncertainty persists around US-Japan trade talks. Despite seven negotiation rounds, no breakthrough has been achieved; recent talks were thrown into doubt following criticism from President Trump over Japan’s reluctance to buy US agricultural goods, particularly rice. The end of a tariff moratorium on July 9 could trigger significant import duty adjustments.
XAU/USD: Gold prices remain under pressure near $3340/oz in thin trading as US markets are closed for Independence Day. The previous day’s US labor data weighed on the metal, with nonfarm payrolls at 147,000, average hourly earnings slowing, and unemployment dropping to 4.1%. Initial jobless claims for the week ended June 27 fell to 233,000, beating forecasts, while continuing claims held steady at 1.964 million. Meanwhile, the US House of Representatives passed the "One Big Beautiful Bill Act," which extends 2018’s tax cuts: corporate tax stays at 21% (down from 35%), and the top marginal income tax rate for joint filers over $600,000 remains at 37% instead of rising to 39.6%. Experts forecast these moves will add $3.3 trillion to the US national debt in the next decade.