US dollar unable to hold post-payroll gains 

Pound (GBP) regains ground as Starmer backs Chancellor 

The pound (GBP) recouped some of Wednesday’s losses yesterday after Prime Minister Keir Starmer publicly backed Chancellor Rachel Reeves, quashing rumours she might be replaced. 

A stronger-than-expected final services PMI also supported the pound, although GBP’s recovery was limited. 

Sterling may find its movement muted today, as the week comes to a close with no notable UK data on the docket. 

Euro (EUR) undermined by lacklustre PMI 

The euro (EUR) trended lower yesterday, as the Eurozone’s final services PMI failed to provide the single currency with much support. 

Although the PMI was revised slightly higher, activity remained at a near standstill last month. 

This morning, German factory orders came in far worse than forecast, with orders slumping 1.4% in May, which could weigh on EUR. However, any hawkish comments from European Central Bank (ECB) President Christine Lagarde could aid the common currency. 

US dollar (USD) spikes as payrolls beat forecasts 

The US dollar (USD) jumped yesterday thanks to forecast-beating US jobs data, with the non-farm payrolls figure printing at 147,000 in June, up from 144,000 in May and above forecasts of 110,000.  

However, this proved to be a temporary spike as concerns about Donald Trump’s tax and spending bill, as well as tariff uncertainty, stifled the US dollar’s potential. 

US markets are closed today for Independence Day, which could mean USD movement is subdued. 

Canadian dollar (CAD) buoyed by stronger US dollar 

The crude-linked Canadian dollar (CAD) enjoyed some support yesterday. Although oil prices softened slightly, they held on to the bulk of Wednesday’s gains. 

Turning to today, Canada’s June services PMI could impact CAD. If the sector remained in contraction last month, the ‘loonie’ may struggle to find support. 

Australian dollar (AUD) subdued amid uncertain mood 

The Australian dollar (AUD) was muted overnight as a lack of data and a mixed market mood left the ‘Aussie’ lacking support. 

New Zealand dollar (NZD) flat in quiet trade 

The New Zealand dollar (NZD) was also rangebound last night, amid an uneventful Asian trading session. 

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