USD remains supported on jobs, PMI news
The greenback was mostly higher overnight on the back of stronger US economic data, but risk-sensitive currencies like the Aussie and kiwi outperformed.
The USD was supported by a solid Chicago PMI, which came in at 56.7 versus 55.7 forecast. Anything above 50 signals expansion.
The key JOLTS figure (Job Openings and Labor Turnover Survey) also beat expectations at 7.59 million. The stronger JOLTS result lifted expectations ahead of Thursday’s earlier-than-usual non-farm employment report, although markets will look to tonight’s ADP report before fully making an assessment.
A firmer USD saw EUR/USD and GBP/USD drift lower, but USD/CAD eased ahead of the Canada Day holiday.
In Asia, USD/JPY extended its rally to fresh 40-year highs.
Stronger data also supported US equities, boosting risk sentiment more generally. The AUD/USD rose 0.5%, rebounding strongly from the 200-day moving average and pointing to a potential shift toward a more positive trend. NZD/USD also bounced, finding support around 0.5700.
Australia factories gain traction
Australia’s S&P Global manufacturing PMI rose to 51.5 in June from 50.7, marking its highest reading since January and a third consecutive month above the 50 threshold. Stronger hiring activity and higher input inventories supported the improvement. However, factory output contracted for a fifth straight month, while new orders declined again as economic uncertainty and higher prices continued to weigh on demand. Although price and supply pressures remained elevated, inflation eased from May levels. Overall, the data points to a gradual improvement in manufacturing conditions, but weak production and ongoing supply challenges continue to temper the outlook.
While Australia’s manufacturing sector showed tentative signs of improvement, attention now shifts to Europe, where EUR/USD remains under pressure despite recent stabilisation.
The pair remains almost 6% below its recent high of 1.2081 from 27 January. Initial resistance sits at the 21-day EMA at 1.1479, followed by the 50-day EMA at 1.1558. On the downside, 1.1350 remains the next key support level.
Sterling holds its ground
Sterling continues to demonstrate resilience despite lingering political uncertainty. Most notably, the pound has made a more forceful push above the 1.16 level against the euro, an area that has acted as key resistance since the summer of 2025.
Market complacency reflects what is now a well-priced fragile political backdrop, raising the bar for further sterling downside. At the same time, markets seem to be treating Andy Burnham as a prime minister-in-waiting, with a “honeymoon” phase already under way. Recent history suggests that sterling often performs relatively well during periods when investors coalesce around an incoming leader and in the months following a leadership.
Downside risks, however, remain. These are likely to re-emerge more clearly toward year-end as geopolitical developments fade from focus and markets shift their attention back to domestic affairs. This would coincide with Burnham beginning to confront the UK’s fragile fiscal position more directly once in office, prompting investors to subject his policy agenda to greater scrutiny.
GBP/USD has found firm support around 1.3200, with initial resistance located near 1.3260, followed by 1.3340. A test of 1.3200 this week would be warranted should US labour market data surprise to the upside, although we do not expect a decisive break lower. The Federal Reserve’s reaction function remains primarily driven by inflation dynamics, while signs of stabilisation in the labour market are already well understood by investors.
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Calendar: 29 June – 3 July
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
