Daily Forex Highlights – Jul 03 – NFP adds just 57K; dollar slides as Fed hike bets evaporate

📌 What Moves Markets Today

US June payrolls rose just 57,000, well below the 110,000 forecast. Prior months were revised lower by 74,000. The unemployment rate ticked down to 4.2% despite the weak headline. Money market fund assets hit a record $7.95 trillion.

The dollar is under broad pressure as Fed rate hike expectations evaporate. EUR/USD is holding near 1.1450, GBP/USD is capped below 1.3400, and USD/JPY is stabilizing below 161.50 amid intervention risks.

🔴 Bearish for the dollar as rate hike bets evaporate.

🟢 Bullish for EUR, GBP, and gold as the dollar weakens.

🔴 USD/JPY upside is limited by intervention risks.

🔥 Quick Takes

Dollar

- Trump: Warsh has a "somewhat hostile" board; will continue pushing to fire Governor Cook through litigation. US GDP should be growing at 12-13% → A political shot at the Fed. GDP claims are unrealistic.

- US June nonfarm payrolls: +57,000 vs +110,000 expected. April-May revisions: -74,000 net → A massive miss signaling a rapidly softening labor market.

- US June unemployment rate: 4.2% (vs 4.3% expected), lowest since June 2025 → A contradictory signal—the jobless rate fell despite weak hiring.

- Fed's Daly: Despite above-target inflation, no signs of insufficient economic resilience. A good sign for the economy → A dovish-leaning assessment. No urgency to hike.

- ICI data: Money market fund assets hit a record $7.95 trillion → Cash is piling up as investors sit on the sidelines.

Euro

- German coalition plans €10 billion/year in tax cuts, funded by wealth tax adjustments → A pro-growth fiscal push that is positive for the euro.

- German Chancellor Merz: Will propose tax simplification by autumn → A longer-term reform signal. Not an immediate market driver.

- ECB President Lagarde: June's hike was the right call; supply shocks are still transmitting → Defending the ECB's recent move. More hikes could follow if needed.

Pound

- BOE's Mann: Ready to hike if price pressures persist → A hawkish voice. The BOE is not done yet.

- Times: BOE to limit debt size hedge funds can use to buy gilts → A regulatory move. Could reduce leverage in the gilt market.

Yen

- Finance Minister Katayama: Reiterated readiness to respond appropriately to yen moves → Verbal intervention. Markets are on notice.

Other

- Weak inflation locks Swiss National Bank on hold for the year; the franc's rebound has stalled → The SNB is staying put. No rate cuts ahead.

- Sources: Denmark central bank intervened in FX last month, buying 700 million kroner → A modest intervention. The krone is being defended.

- Thailand shippers' association: The baht should weaken to support exports → A clear preference for a weaker currency. The baht may face headwinds.

💡 Technical Analysis

Source: Investing.com – Prices as of Jul 03, 2026

EUR/USD – 1.1450

The pair is holding near 1.1450, extending gains as dollar weakness persists. Price is testing the upper boundary of an ascending channel, which forms a bearish flag pattern on the 4-hour chart. The 200-period EMA at 1.1516 and the 38.2% Fibonacci retracement at 1.1525 form a significant overhead barrier. RSI near 60 suggests modest upside momentum.

MACD remains slightly positive. Support is at 1.1371 and 1.1325. Resistance is at 1.1466, 1.1516, and 1.1525. A sustained break above the 23.6% Fibo level is needed to confirm further upside.

GBP/USD – 1.3390

The pair is trading in positive territory but remains capped below 1.3400. Price sits above the Bollinger middle band, keeping a modestly supported tone, but remains below the 100-day SMA at 1.3410. RSI near 54 suggests steady momentum.

Resistance is at 1.3410 (100-day SMA) and 1.3468 (upper Bollinger band). Support is at 1.3300 and 1.3132.

USD/JPY – 161.30

The pair is stabilizing below 161.50. Intervention risks and broad dollar weakness are capping the upside. Price remains above the 20-day EMA (160.85), keeping the short-term bullish bias intact. RSI at 71.6 remains in overbought territory.

Support is at 160.85. Resistance is at 162.00 and 163.00. Intervention risks could trigger sharp reversals.

🔮 What to Watch This Week

- 🇺🇸 Fed speakers – any acknowledgment of the weak jobs data?

- 🇪🇺 ECB messaging – will Lagarde's defense of June's hike hold?

- 🇯🇵 Japan intervention – verbal or actual?

- 🇬🇧 UK politics – Burnham's fiscal plans

- 🇨🇭 Switzerland SNB – any policy signals?