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.
China PMI rebound fails to ease demand concerns
China’s official manufacturing PMI climbed to 50.3 in June from 50.0, beating expectations and returning to expansion territory. The non-manufacturing PMI also inched higher to 50.2, while the composite PMI rose to 50.6. New orders improved to 51.2, export orders returned to expansion at 50.1, and production strengthened to 51.4, supported by demand for high-tech exports.
Despite the stronger headline figures, underlying demand remains fragile. Recent retail sales and property market data continue to point to subdued domestic activity, while factory-gate prices fell further into contraction at 48.2. The latest PMI readings help ease immediate growth concerns but are unlikely to remove expectations for further policy support.
In Asia, USD/CNH continues to trade close to a three-year low and remains around 0.6% above its 17 June trough of 6.7539. To strengthen upside momentum, the pair needs to break above its 100-day EMA at 6.8436. On the downside, the 21-day EMA at 6.7889 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.
Global markets boosted with oil down 23% in June
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 29 June – 3 July
Have a question? [email protected]
*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.
