Forex News

• AUD/USD climbed as the USD weakened after softer-than-expected US labor market data, with investors trimming expectations for further Fed tightening.
• US NFP disappointed sharply, adding only 57,000 jobs in June versus expectations near 110,000.
• Wages and jobless claims showed resilience, with Average Hourly Earnings rising 0.3% MoM and Initial Jobless Claims falling to 215,000, suggesting labor demand is cooling but not collapsing.

The AUD/USD pair climbed near the 0.6930 area on Thursday as the US Dollar (USD) came under pressure following softer-than-expected United States (US) labor market data. The pair advanced as investors trimmed expectations for further Federal Reserve (Fed) tightening, although weaker Australian trade figures limited the Aussie’s upside.

The US Nonfarm Payrolls (NFP) report showed that the US economy added only 57,000 jobs in June, well below expectations of around 110,000. May’s figure was also revised lower to 129,000 from the previously reported 172,000, reinforcing signs that hiring momentum is cooling. Despite the weaker-than-expected headline, the Unemployment Rate unexpectedly fell to 4.2% from 4.3%, although the decline was partly offset by a drop in labor force participation to 61.5%.

Wage data remained steady with Average Hourly Earnings rising 0.3% MoM in June to $37.64, while annual wage growth stood at 3.5%. The average workweek was unchanged at 34.3 hours, suggesting that labor demand is slowing but not collapsing.

Other labor data also pointed to a resilient jobs market. Initial Jobless Claims fell to 215,000 in the week ending June 27, below expectations, while Continuing Claims increased slightly to 1.814 million. The figures suggest layoffs remain contained, even as companies appear more cautious about hiring.

The softer payrolls report pushed US Treasury yields lower and weighed on the Greenback, with the US Dollar Index falling toward the 100.70 area. Lower US yields usually support higher-beta currencies such as the Australian Dollar, helping AUD/USD recover despite weakness in Australia’s own data.

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.6930. The pair is supported by the 20-period Simple Moving Average (SMA) around 0.6895 and a series of nearby horizontal floors, hinting at a mildly constructive tone, yet it remains capped below the 100-period SMA at 0.6972. The horizontal resistance at 0.6944 forms the first topside barrier ahead of the medium-term average, while the Relative Strength Index (RSI) near 61 shows firm but not extreme bullish momentum that could encourage further probing of overhead supply if 0.6944 gives way.

On the downside, initial support is seen at 0.6916, followed by 0.6903 and the 20-period SMA at 0.6895, with a deeper cushion at 0.6883. On the topside, a break above 0.6944 would expose the 100-period SMA at 0.6972 as the next key resistance, and only a sustained move above this level would open the door for a more pronounced bullish extension in the near term.

(The technical analysis of this story was written with the help of an AI tool.)

• NZD/USD advances after a weaker-than-expected US employment report.
• US job creation slows sharply in June, reinforcing expectations of Fed policy hold.
• BNY notes that the RBNZ will maintain a six-member MPC ahead of its July 8 meeting.

NZD/USD rises 0.59% on Thursday to trade around 0.5705 at the time of writing, supported by a sharp decline in the US Dollar (USD) following the release of a significantly weaker-than-expected US employment report.

Data released by the Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) increased by only 57K in June, well below the market consensus of 110K. May's reading was revised down to 129K from 172K previously, while April's figure was also revised lower to 148K from 179K, resulting in a combined downward revision of 74K jobs. Meanwhile, the Unemployment Rate unexpectedly declined to 4.2% from 4.3%, while the Labor Force Participation Rate fell to 61.5% from 61.8%. Annual wage growth, as measured by Average Hourly Earnings, accelerated slightly to 3.5%, in line with expectations.

Markets are nevertheless focusing on the weak headline payroll figure, reinforcing expectations that the Federal Reserve (Fed) could adopt a less hawkish monetary policy over the coming months. This outlook weighs on the US Dollar and supports rival currencies, including the New Zealand Dollar (NZD).

On the New Zealand side, domestic developments are also providing support to the currency. According to BNY, the Reserve Bank of New Zealand (RBNZ) will maintain a six-member Monetary Policy Committee (MPC) until the November election, following a split 3-3 vote at its May meeting. The bank also noted that May building consent data showed a monthly decline in new approvals but a 19% increase on an annual basis, highlighting that residential activity remains resilient ahead of the July 8 monetary policy decision.

• NFP misses forecasts, with prior months revised sharply lower.
• Fed tightening bets ease as yields pressure the US Dollar.
• Political uncertainty and rumors of intervention keep Cable volatility elevated.

The Pound Sterling (GBP) registers solid gains against the US Dollar (USD) on Thursday after the latest US employment report missed estimates, reducing the chances of a Federal Reserve (Fed) rate hike. At the time of writing, the GBP/USD pair trades at 1.3359, down 0.64%, its highest level over the last ten days.

GBP/USD gains as soft payrolls drag Dollar and yields lower

The US jobs market weakened slightly in June, with Nonfarm Payrolls coming at 57K below estimates of 110K. May's numbers were downwardly revised from 172K to 129K, and April’s data were revised from 179 K to 148 K. The Unemployment Rate ticked lower from 4.3% to 4.2%, but analysts blame it on a decline in labor force participation, which reached 61.5%, the lowest since March 2021.

Money markets adjusted their Fed hawkish bets, with investors expecting just 23 basis points of tightening towards the end of the year, according to Prime Terminal data.

US Treasury yields are aiming lower, with the 10-year T-note yields at 4.461%, down 2 basis points, a headwind for the Greenback. The US Dollar Index (DXY), which tracks the buck’s performance against a basket of six currencies, is down 0.65% at 100.75.

US Factory Orders contracted in May, due to a decline in commercial aircraft orders, with the numbers dropping to -1.3%, below estimates of -1.8% but down from April’s stellar 5.3% print.

San Francisco Fed's Mary Daly commented that she sees positive signs about the US economy and recognised that higher prices were caused by tariffs and the Oil price shock. She added that the policy is “slightly restrictive,” yet noted that there are scenarios in which the Fed must fight inflation.

In the UK, the economic schedule was absent, but the focus is on Andy Burhnamw, the favorite to succeed the current Prime Minister Keir Starmer.

Traders remain cautious about Cable amid uncertainty over Burnham’s policies. Meanwhile, the GBP remains boosted by the fall in Oil prices and by rumors of Japanese authorities intervening in the foreign exchange markets, as the USD/JPY pair fell from around 162.50 to 160.95 at the time of writing.

GBP/USD Price Forecast: Technical outlook

On the daily chart, GBP/USD trades at 1.3362, holding a bearish near-term bias as spot remains capped beneath the cluster of simple moving averages (50, 100 and 200) around 1.3413 and below the descending resistance trend line projected from 1.3522. The pair has slipped away from prior highs while the Relative Strength Index (14) at 54 stays just above its neutral line, hinting at modest rather than aggressive upside momentum that so far fails to overcome the overhead structure.

On the topside, initial resistance is located at the triple simple moving average area near 1.3413, with the next barrier coming at the descending trend resistance around 1.3522. On the downside, the key technical floor is the rising support trend line originating near 1.3159, where a decisive break would reinforce the broader bearish tone and expose lower levels, while holding above it would keep the pair bounded in a corrective consolidation under the moving averages.

(The technical analysis of this story was written with the help of an AI tool.)

ING’s Carsten Brzeski analyses a new German government reform package focused on cutting red tape, increasing labour market flexibility, and capping healthcare and pension costs to restore competitiveness. He notes that while the measures will not turn Germany’s stagnating economy into a booming one overnight, they can create a framework for future growth and support a more optimistic German GDP outlook.

Reforms aim to boost competitiveness

"Germany's World Cup campaign may have come to an abrupt end, but the country's reform drive is gathering momentum. In a bid to reverse the rather uncomfortable narrative, the government has just unveiled a sweeping reform package aimed at boosting competitiveness and demonstrating a renewed willingness to act. It may have taken longer than many hoped, but Germany's long-awaited summer of reforms has finally arrived."

"Most of today’s announced measures have not come out of the blue. The bureaucracy detox and simplifications were already presented in two important reports at the end of last year. What is new is the tax relief for lower and middle-income households."

"What is still missing is a clear longer-term strategy for affordable energy for both households and companies, as well as some tax relief for companies. Still, today’s reform package is finally a clear sign that Germany is at last moving. A departure away from moaning and analysing, towards tangible action."

"Admittedly, the package will still have to pass parliament, and it is not a package that will morph a stagnating economy into a booming economy overnight. But it is a package that could create the preconditions, the framework, for future growth. The healthcare and pension reform will put public finances on a sustainable footing in light of demographic change, and the other structural measures could loosen the brakes for future growth."

"Add to that the ongoing fiscal stimulus for infrastructure and defence, and the narrative for German growth turns more optimistic. It seems as if Germany has finally understood that economic success does not simply or effortlessly return. This is an enormous change and shows that, for once, the German government is definitely one step ahead of the national football team."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• Silver jumps over 3% as disappointing US NFP data pressures the Greenback.
• September Fed rate hike odds fall following softer-than-expected NFP data.
• Technically, XAG/USD faces immediate resistance at $61.50, with the broader trend remaining tilted to the downside.

Silver (XAG/USD) climbs to the top of its weekly trading range on Thursday as the US Dollar (USD) slides to a two-week low after US Nonfarm Payrolls (NFP) data surprised to the downside. At the time of writing, XAG/USD trades around $61.15, up nearly 3.50% on the day.

Data released by the US Bureau of Labor Statistics (BLS) showed the US economy added just 57K jobs in June, well below market expectations of 110K. Meanwhile, May's payrolls were revised down to 129K from the previously reported 172K.

Traders quickly scaled back expectations for a Federal Reserve (Fed) rate hike at its September policy meeting, with the probability of a rate increase falling to 51% from 63% before the data release, according to the CME FedWatch Tool.

The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 100.74, retreating from an intraday high of 101.43.

However, the US Dollar's downside may remain limited as the weak employment report did little to change the Fed's hawkish stance. With inflation still running well above the central bank's 2% target, markets continue to expect the Fed could raise interest rates later this year, which could limit a stronger recovery in XAG/USD.

Technical Analysis:

On the daily chart, XAG/USD retains a bearish near-term bias as it holds below the 200-day Simple Moving Average (SMA) at $69 and the 100-day SMA at $75.

The Relative Strength Index (RSI) around 39 keeps momentum in mildly negative territory. The Moving Average Convergence Divergence (MACD) indicator remains slightly below zero with a shallow negative reading, hinting at weak downside pressure rather than a decisive bearish acceleration.

On the topside, immediate resistance is located at $61.50, with the 200-day SMA at $69.88 and the 100-day SMA at $75.08 reinforcing a broader ceiling for any recovery attempts.

On the downside, initial support emerges at the horizontal level of $55.50, where a decisive break could trigger further losses.

(The technical analysis of this story was written with the help of an AI tool.)

Commerzbank’s Bernd Weidensteiner notes that weaker US employment data for June and downward revisions to prior months reduce pressure on the Federal Reserve to hike rates at the late-July meeting. With Oil prices sharply lower and inflation expected to ease, Commerzbank continues to forecast that US key interest rates and the federal funds rate will remain unchanged through 2026.

Soft jobs data underpins Fed pause

"Pressure for an interest rate hike at the Fed meeting in late July continues to ease."

"The job numbers, which fell short of expectations, are likely to put an end—for now—to the discussions about a short-term interest rate hike by the Fed that have flared up repeatedly in the meantime."

"Thus, the key data—which, according to Fed Chairman Warsh, market participants should rely on when assessing the trajectory of the federal funds rate—do not support an interest rate hike at the meeting in late July."

"We continue to expect US key interest rates to remain unchanged this year."

"We see this as confirmation of our assessment that the Fed will hold rates steady this year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

DBS Group Research economist Radhika Rao notes that Indonesia’s onshore FX and bond markets have stabilised following a correction in global Oil prices, though gains are modest. She highlights USD/IDR’s move below 18000, persistent underperformance versus regional peers, and foreign interest returning to IDR bonds. Rao argues more constructive official commentary and softer US tightening expectations are needed for a stronger IDR and lower 10-year yields.

IDR, bonds steady after oil correction

"Onshore FX and bond markets have stabilised on the back of a correction in global oil prices, although scale of gains has been measured."

"USD/IDR broke below 18000, although ran into buyers at sub-17850, which has led the currency to maintain its position as the regional underperformer."

"More constructive commentary from the domestic authorities/ regulators and scaling back of US tightening expectations are required to open the room for a rally in the IDR and for the 10Y yield to decisively break below 7%."

"Foreign interests have returned to IDR bonds (12.7% share in outstanding; turning net buyers YTD and in June), although flows remain tepid in equities."

"Equity markets received a temporary reprieve from the MSCI’s decision to retain Indonesia at emerging market status, although volatility is set to rise ahead of the November review."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• US job growth slows sharply in June, with only 57K jobs added, well below expectations.
• The US Dollar weakens after disappointing labor market data, despite the Unemployment Rate falling to 4.2%.
• The Japanese Yen strengthens sharply as markets remain alert to the risk of intervention by Japanese authorities.

USD/JPY falls 0.92% on Thursday and trades around 161.05 at the time of writing after a much weaker-than-expected US employment report weighs on the US Dollar (USD).

Data released by the Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) increased by only 57K in June, compared with market expectations of 110K. May's reading was revised lower to 129K from 172K previously, while April's figure was revised down to 148K from 179K, resulting in a combined downward revision of 74K jobs.

The report nevertheless offered more mixed signals. The Unemployment Rate unexpectedly declined to 4.2% from 4.3%, while the Labor Force Participation Rate fell to 61.5% from 61.8%. Meanwhile, annual wage growth, as measured by Average Hourly Earnings, accelerated slightly to 3.5%, in line with market expectations.

Markets are nevertheless focusing on the weak headline payroll figures, reinforcing expectations that the Federal Reserve (Fed) could adopt a less hawkish monetary policy throughout the year. This weighs on the US Dollar, contributing to USD/JPY's decline.

The move is also fueled by speculation over a possible intervention by Japanese authorities in the foreign exchange market. According to Reuters, Japan's Ministry of Finance (MoF) declined to comment on the recent surge in the Japanese Yen (JPY), while traders remain alert to any action aimed at supporting the Japanese currency. In addition, expectations that the Bank of Japan (BoJ) could raise interest rates again before the end of the year continue to underpin the Japanese Yen.

• Gold extends gains above $4,000 as weaker-than-expected US Nonfarm Payrolls weigh on the US Dollar.
• Markets trim expectations for a Fed rate hike at the September meeting.
• Technically, XAU/USD needs a decisive break above $4,100 to ease the current bearish pressure.

Gold (XAU/USD) trades on the front foot on Thursday as the US Dollar (USD) weakens amid rumors of a potential intervention by Tokyo after the Japanese Yen (JPY) hit a 40-year low earlier this week. The Greenback extended its losses following a weaker-than-expected US Nonfarm Payrolls (NFP) report.

At the time of writing, XAU/USD trades around $4,120, up nearly 2.20% on the day. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, trades around 100.75, hitting a two-week low.

Data released by the US Bureau of Labor Statistics (BLS) showed the US economy added 57K jobs in June, well below market expectations of 110K. Meanwhile, May's payrolls were revised lower to 129K from the previously reported 172K.

Meanwhile, the Unemployment Rate unexpectedly edged lower to 4.2% from 4.3% in May. Average Hourly Earnings rose 0.3% MoM and 3.5% YoY in June, matching market expectations.

The weak NFP print helped cool expectations of a more hawkish Federal Reserve (Fed), pushing Gold above its one-week trading range to trade above the $4,100 mark. According to the CME FedWatch Tool, the probability of a rate increase in September fell to 51% from 63% before the data release.

Still, monetary policy is expected to remain restrictive for longer after Fed Chair Kevin Warsh reiterated his commitment to restoring inflation to its 2% target at the European Central Bank (ECB) Forum on Wednesday. "We are in the price stability business," he said, even as he acknowledged that "inflation risks have come down."

San Francisco Fed President Mary Daly said on Thursday, "It's possible we may have to fight more persistent inflation," while adding, "Can't decide right now, can't give false guidance on rates."

Against this backdrop, Gold may struggle to stage a meaningful recovery as traders continue to anticipate that the Fed could raise interest rates later this year.

However, inflation concerns have eased in recent weeks following the sharp decline in Oil prices after the United States and Iran signed a 60-day Memorandum of Understanding (MoU) last month that partially reopened the Strait of Hormuz.

West Texas Intermediate (WTI) crude trades around $67 per barrel, its lowest level since February, retreating from a peak of $113 during the US-Iran war.

In the recent developments, indirect talks between the two sides concluded in Doha, with Qatari mediators reporting "positive progress," although no significant breakthrough was announced.

Technical analysis: Bulls look to reclaim $4,100

XAU/USD keeps a bearish near-term bias as price holds well below the 200-day Simple Moving Average (SMA) and the 100-day SMA.

The metal is hovering just above the $4,100 level. A decisive break above it would ease the near-term bearish pressure. The Relative Strength Index (RSI) on the daily chart is at 42, below the neutral 50 mark and hinting at lingering downside momentum, while the Average Directional Index (ADX) is near 41, signaling a relatively strong prevailing trend.

On the topside, initial resistance appears at $4,100, followed by a stronger barrier at $4,300 before the longer-term cap from the 200-day SMA at $4,483 and the 100-day SMA at $4,643.

On the downside, immediate support is seen at $3,950, with a deeper bearish extension exposing the next key floor at $3,800, where buyers would be expected to show more interest if the current slide continues.

(The technical analysis of this story was written with the help of an AI tool.)