Dollar is pausing its recent slide as markets brace for today’s Non-Farm Payrolls report, but its recovery remains shallow. Barring its gains against the troubled British Pound, the greenback remains broadly weaker against major currencies for the week. Traders are increasingly wary of a downside surprise in the jobs report, which could revive speculation that the Fed may cave to growing political pressure and deliver a rate cut as early as this month. Market sentiment could shift quickly if labor market cracks deepen.
Such a shift could further weigh on Dollar, already dragged by rising fiscal concerns and mixed signals on trade. President Donald Trump announced a trade deal with Vietnam that includes a 20% tariff on Vietnamese goods and a steep 40% “transshipping” tariff. In a separate move signaling goodwill, the US government lifted export restrictions on chip-design software to China. However, broader trade negotiations with major economies remain stalled, and the July 9 self-imposed tariff truce deadline still looms with little indication of delay or progress.
Across the Atlantic, the British Pound is reeling. Turmoil within the Labour government sparked fresh selling yesterday, with Chancellor Rachel Reeves’ position suddenly appearing shaky after Prime Minister Keir Starmer failed to offer a clear endorsement. Reeves has been the face of fiscal responsibility, and markets fear that her possible replacement by a more dovish figure—like cabinet minister Pat McFadden—could signal a shift toward more borrowing. Gilt yields have surged in response, and Sterling continues to lead the weekly losses among major currencies.
Swiss Franc and Euro are outperforming this week, both capitalizing on the floundering Pound. Yen and Loonie are relatively directionless, while the Aussie and Kiwi are struggling to gain traction.
Technically, Bitcoin’s bounces yesterday is solidifying the case that correction from 112013 has competed at 98148 already. Focus is back on 112013 resistance. Decisive break there will resume the long term record run, and target 100% projection of 49008 to 109571 from 74373 at 134936 next.
In Asia, at the time of writing, Nikkei is down -0.06%. Hong Kong HSI is down -0.76%. China Shanghai SSE is up 0.19%. Singapore Strait Times is down -0.10%. Japan 10-year JGB yield is up 0.019 at 1.451. Overnight, DOW fell -0.02%. S&P 500 rose 0.47%. NASDAQ rose 0.94%.
NFP report could tip scale in politicized Fed debate over rate cuts
The June US Non-Farm Payrolls report lands today at a moment when the Fed is facing increasingly overt political pressure. President Donald Trump has ramped up calls for rate cuts, and two Fed governors—Christopher Waller and Michelle Bowman—are aligning with that view. Both have recently suggested that a rate cut this month is on the table, and both are seen as potential candidates to replace Jerome Powell. That political backdrop is raising the stakes for today’s data.
So far, Fed Chair Jerome Powell and the broader FOMC have pushed back against moving too soon, emphasizing the need to assess incoming information, particularly on inflation and tariffs. However, if today’s jobs data weakens materially, Fed could face tremendous pressure from Trump’s political orbit.
Consensus expects a moderate 110k rise in payrolls, unemployment ticking up to 4.3%, and wages growth at 0.3% mom. But recent indicators—ADP’s unexpected -33k drop, soft ISM employment, and a rising four-week average of jobless claims—suggest the risk is skewed toward a downside surprise. A shocking print under 100k could provide fresh ammunition for those lobbying for immediate action, both inside and outside the Fed.
Markets still only price around a 25% chance of a July cut, with September seen as more likely. But if today’s NFP misses badly, that calculus could change fast.
Fed’s Barkin downplays ADP miss, needs more data before acting
Speaking to Fox Business, Richmond Fed President Tom Barkin dismissed alarm over the unexpected drop in ADP employment, saying he’s more focused on the unemployment rate in Friday’s jobs report. With joblessness steady around 4.1% to 4.3% for over a year, Barkin suggested “that all feels like a pretty stable range”. He also noted that slower job growth must be seen in context with a cooling labor force, particularly as immigration flows ease.
Asked whether a weak payrolls figure could prompt the Fed to cut rates in July, Barkin avoided specifics and emphasized that the decision would depend on a broader set of inputs. “There’s more we’re going to learn,” he said, citing upcoming inflation data, tariff developments, and the pending tax bill. His remarks signal continued caution inside the Fed, even as market expectations lean toward a cut by September.
Despite recent data noise, Barkin remained cautiously optimistic. “What I see is a solid economy — not a strong economy — but a solid economy, one where people are not yet pulling back,” he said.
BoJ’s Takata sees “True Dawn” for Japan, urges caution but not pessimism on tariffs
BoJ board member Hajime Takata said in a speech today that Japan may finally be emerging from decades-long economic stagnation. Reflecting on the structural decline since the 1990s, driven by the collapse of the bubble economy and intensifying global competition, Takata noted that while firms built resilience through deleveraging and restructuring, this also entrenched a low-investment, low-wage, and low-price “norm”.
Takata argued Japan is “finally beginning to break free of this norm”. Recent shifts in corporate pricing and wage behavior suggest Japan could be on the cusp of a sustained recovery. Still, he warned that US tariff policies risk derailing progress, recalling how similar global shocks in the 2000s repeatedly interrupted Japan’s economic revivals.
Yet’s Takata’s confident that this time could mark a “true dawn” and emphasized that being “overly pessimistic also poses a considerable risk”. He noted that the BOJ should maintain its accommodative stance for now, but also continue “gradually and cautiously” transitioning policy as conditions allow. Japan, he said, has a history of enduring far more intense trade tensions and should avoid falling into excessive pessimism.
Japan’s PMI composite finalized at 51.5, recovery fragile on sluggish demand
Japan’s private sector posted modest gains in June, with the final PMI Services index rising to 51.7 from 51.0 and the Composite index improving to 51.5 from 50.2 in May. The latest data signalled continued expansion, though momentum softened compared to the first quarter. S&P Global’s Annabel Fiddes noted that second-quarter PMI readings suggest a slowdown in GDP growth.
“Demand conditions remained sluggish” as new business rose only fractionally for the second month, and new export orders continued to decline. Firms are still struggling to gain traction amid US tariff uncertainty.
Meanwhile, inflationary pressures persisted. Businesses reported “strong cost pressures”, partly due to rising staffing levels. These costs were passed on through quicker hikes in output prices, despite muted demand.
China’s Caixin PMI services PMI falls to 50.6, but composite returns to growth
China’s Caixin PMI Services dropped to 50.6 in June from 51.1, missing expectations of 51.0. However, the broader PMI Composite rose from 49.6 to 51.3, marking a return to growth territory driven largely by stronger manufacturing activity. Caixin’s Wang Zhe noted that while supply and demand both improved, the rebound remains uneven and fragile.
Still, the data suggest mounting challenges. Employment continued to contract, and firms were forced to cut selling prices at the fastest rate in over a year, squeezing profitability despite stable input costs. Optimism weakened amid ongoing uncertainty, with business sentiment falling below its long-term average.
USD/CHF Daily Outlook
Daily Pivots: (S1) 0.7902; (P) 0.7921; (R1) 0.7941; More….
Intraday bias in USD/CHF remains neutral and more consolidations could be seen above 0.7871 temporary low. Upside of recovery should be limited by 0.8054 support turned resistance to bring another fall. Below 0.7871 will extend the larger down trend to 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757. Firm break there will pave the way to 100% projection at 0.7313 next.
In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.
