At 11:00 (GMT+2), July retail sales will be released: forecasts suggest a slowdown in annual growth from 3.1% to 2.4%, and a monthly decline of 0.2% after a 0.3% increase in the previous month, amid rising prices and the overall cost of living. Investors remain concerned about cuts to several social programs across EU countries, accompanied by higher defense spending. These concerns were reinforced by business activity statistics published on Wednesday: Germany’s services PMI from Hamburg Commercial Bank (HCOB) fell from 50.1 to 49.3 in August, while the eurozone index as a whole dropped from 50.7 to 50.5. Meanwhile, producer price inflation continues to decelerate: in July, the annual figure slowed from 0.6% to 0.2%, and the monthly indicator — from 0.8% to 0.4%. In the U.S., data on jobless claims will be published today at 14:30 (GMT+2), and at 14:15 (GMT+2) the ADP private-sector employment report is due, providing a preview of Friday’s final labor market report at 14:30 (GMT+2). Forecasts suggest job growth will slow from 104K to 65K.

GBP/USD

The pound weakens against the U.S. dollar during the morning session, though it retains a slight bullish bias after Wednesday’s corrective rebound. The pair is testing 1.3430 on an upward breakout attempt but has yet to fully recover losses from Tuesday, when it updated local lows from August 6. The upward movement is partly driven by technical factors, as some investors are locking in profits ahead of today’s U.S. labor market releases. At 14:15 (GMT+2), the ADP private-sector jobs report will be published, with forecasts pointing to a slowdown from 104K to 65K. Meanwhile, Minneapolis Fed President Neel Kashkari noted that the regulator is in a difficult position due to stubbornly high inflation, which could rise further, making it premature to declare victory. At the same time, the U.S. economy shows signs of cooling, and the labor market is softening. Kashkari suggested that a sustainable pace would be about 75K new jobs per month. A Fed rate cut could prompt the Bank of England to follow suit, even though inflationary pressures in the U.K. remain elevated. Still, the British economy has less margin for hesitation. On the positive side, U.K. services PMI rose from 53.6 to 54.2 in August, while the composite index improved from 53.0 to 53.5. Tomorrow at 08:00 (GMT+2), July retail sales will be released: annual growth is expected to slow from 1.7% to 1.3%, and monthly growth from 0.9% to 0.2%.

AUD/USD

The Australian dollar weakens in the AUD/USD pair during the Asian session, erasing Wednesday’s gains that almost fully offset Tuesday’s sharp decline. Support came yesterday from Q2 GDP data: annual growth accelerated from 1.4% to 1.8% (forecast: 1.6%), and quarterly growth rose from 0.3% to 0.6% (forecast: 0.5%). This outcome suggests the Reserve Bank of Australia (RBA) may adopt a wait-and-see stance at its September 30 meeting. Recall that in August, the RBA cut rates by 25 basis points, from 3.85% to 3.60%, signaling further easing as inflation cools. Today, investors are focused on July trade data: exports slowed from 6.3% to 3.3%, imports from –1.5% to –1.3%, while the trade surplus widened from AUD 5.37B to AUD 7.31B, compared with forecasts of a drop to AUD 4.92B. In the U.S., the ADP jobs report at 14:15 (GMT+2) and jobless claims at 14:30 (GMT+2) are in focus. Weekly jobless claims are expected to tick up from 229K to 230K, while continuing claims could rise from 1.954M to 1.960M.

USD/JPY

The U.S. dollar strengthens in USD/JPY during Asian trading, consolidating near the 148.00 level. Market activity remains subdued as forex investors await U.S. labor market data. At 14:15 (GMT+2), the ADP report is expected to show a sharp slowdown from 104K to 65K, setting a potentially negative tone ahead of Friday’s nonfarm payrolls report at 14:30 (GMT+2). Forecasts suggest average hourly earnings will slow from 3.9% to 3.7% y/y, while monthly growth holds at 0.3%. Nonfarm payrolls are seen rising 75K after July’s 73K, while unemployment may edge higher from 4.2% to 4.3%. Meanwhile, Japan’s yen faces political pressure after reports of possible resignation of LDP leader Hiroshi Moriyama following election losses. Sanae Takaichi, known for dovish monetary views, is a leading candidate to replace him. This raises uncertainty over BoJ policy: analysts see a roughly 70% chance of a rate hike before year-end, though September remains unclear.

XAU/USD

Gold extends its strong rally this week, pushing to record highs but now retreating to test 3530.00 on the downside. Traders are cautious ahead of the U.S. labor data flow. The ADP jobs report at 14:15 (GMT+2) is expected to show a slowdown from 104K to 65K, possibly creating a bearish setup before Friday’s final employment figures. With the Fed’s September 17 meeting approaching, investors will scrutinize labor data closely: forecasts suggest wage growth will ease from 3.9% to 3.7% y/y, remain at 0.3% m/m, and payroll gains will hold near 75K. Unemployment is expected to edge up from 4.2% to 4.3%. This data will be critical for shaping expectations around the Fed’s next rate decision.