In parallel to labor market headlines, President Donald Trump announced a fresh US-Vietnam trade accord on Truth Social. Under new terms, Vietnamese goods will be subject to a 20% import tariff—lower than the previously considered 46%. Tariffs of 40% will also apply to third-country goods transiting through Vietnam to the US. Additionally, the US has lifted export restrictions on chip design software for Siemens AG, Synopsys Inc., and Cadence Design Systems Inc., marking a tentative step toward de-escalation with China and opening the door to a possible broader trade agreement between the world’s two largest economies.

Forex Eurozone: Euro Softens on USD Strength Despite Solid Services Data

The euro retreated versus the dollar and pound, though it advanced against the yen. June services PMI for the euro area rose from 49.7 to 50.5, re-entering expansion territory. Composite PMI climbed from 50.2 to 50.6. In Germany, the services index improved from 47.1 to 49.7, with the composite reading jumping from 48.5 to 50.4. Minutes from the ECB’s latest meeting reaffirmed consensus for a rate cut as inflation nears the 2.0% target, but policymakers flagged rising uncertainty amid the White House’s tariff push.

UK: Pound Weakens Versus Dollar, Services Activity Beats Forecasts

The British pound slipped against the US dollar but firmed against the euro and yen. UK services PMI soared from 50.9 to 52.8 in June, far exceeding projections (51.3), while the composite index advanced from 50.3 to 52.0. Notably, the pace of service-sector price increases fell to the slowest since February 2021, raising expectations for further monetary easing by the Bank of England, though most analysts anticipate rates to be held steady at the July meeting.

Japan: Yen Under Pressure Despite Services Growth

The yen underperformed across the board, losing ground to the dollar, euro, and pound. Japan’s services PMI improved from 51.0 to 51.7 in June (vs. forecast 51.5), with the composite PMI rising from 50.2 to 51.7. The Bank of Japan is expected to stay hawkish, but ongoing trade negotiations with the US remain unresolved. President Trump’s latest comments ruled out an extension to the current talks and cast doubt on a breakthrough by the July 9 deadline. Meanwhile, BOJ board member Hajime Takata called for a resumption of rate hikes, noting that robust corporate earnings and labor shortages continue to exert upward pressure on wages and prices.

Australia: Mixed Data, AUD Dips Versus USD

The Australian dollar slipped versus the greenback and pound, firmed against the yen, and traded mixed against the euro. Trade data for May showed exports declining by 2.7%, while imports surged 3.8%, shrinking the trade surplus from A$4.86B to A$2.24B. June services PMI increased from 51.3 to 51.8, with the composite index at 51.6. The macro backdrop remains stable, with subdued inflation providing scope for the Reserve Bank of Australia to maintain an accommodative stance.

Oil: Volatile After US Inventory Build

Oil prices were choppy after the US EIA weekly report showed crude inventories rising by 3.85M barrels, defying expectations for a 3.5M barrel drawdown. Gasoline stocks rose 4.19M barrels, while distillates fell 1.71M barrels. Lower summer driving demand weighed on prices initially, but robust US labor data lent support, reinforcing confidence in the world’s largest economy.