EUR USD

The EUR/USD currency pair is recording moderate growth, developing the uptrend formed last week in the ultra-short-term zone: the instrument is testing 1.0830 in terms of upward breakout, remaining just below the local highs of last Friday, when the asset opened a downward gap at the beginning of the new week. Meanwhile, investors continue to focus on the US labor market report, also released on Friday: the number of non-farm jobs created by the US economy in June decreased from 218.0 thousand (revised from 272.0 thousand) to 206.0 thousand, which was, however, better than the expected 190.0 thousand. Average hourly wages decreased from 4.1% to 3.9% (annual) and from 0.4% to 0.3% (monthly), which should have a positive impact on further reducing inflation risks. The unemployment rate was revised down to 4.1% from 4.0%, while analysts had expected no changes. The US currency's reaction to the data was mixed as investors are now more interested in political events, with the focus on last week's debate between US presidential candidates Joe Biden and Donald Trump and the parliamentary elections in France and the UK. On Friday, traders paid attention to the decline in Eurozone retail sales to 0.3% y/y from 0.6% y/y, which was however better than forecasts of a decline to 0.1% y/y. On a monthly basis, the indicator showed minimal growth of 0.1% m/m after -0.2% m/m in April, while markets had expected 0.2% m/m. Germany recorded a sharp decline in industrial production volume in May, falling by 6.7% on an annual basis from -3.9% and by 2.5% on a monthly basis from -0.1%, while analysts had expected a decline of 0.2%.

GBP/USD

The GBP/USD currency pair is developing a strong uptrend in the short term, updating the local highs of June 12: the quotes began trading with a slight downward gap, as investor activity remained high last Friday amid the release of June data on the US labor market. It is worth recalling that the number of new non-farm jobs in June fell from 218.0k (revised from 272.0k) to 206.0k, better than market expectations of 190.0k. Average hourly earnings fell from 4.1% y/y to 3.9% y/y, or from 0.4% m/m to 0.3% m/m, which supports a further reduction in inflation risks. On the other hand, the unemployment rate rose from 4.0 percent to 4.1 percent, contrary to market expectations. It is assumed that the rise in unemployment may prompt the US Federal Reserve to launch a program to reduce borrowing costs: the first adjustment of the key rate is expected in September. The British currency found additional support from the results of the parliamentary elections in the country, in which the Labour Party won for the first time in a long time. The new Prime Minister of the United Kingdom will be Keir Starmer, who previously promised to take care of economic stability and reduce budget spending, which may provide additional support to the pound as a safe haven. At the same time, the Bank of England is expected to soon take steps to ease monetary policy, since inflation in June fell almost to the target of 2.0%: it is assumed that the British regulator may start cutting interest rates at the same time as the US Federal Reserve, that is, in September or a little later.

AUD/USD

The AUD/USD currency pair is developing an uptrend in the short term, renewing the local highs of January 4: the instrument is testing the 0.6750 mark in terms of upward breakout, while the Australian currency's positions were slightly pressured by macroeconomic statistics. For example, mortgage loans fell by 2.0% in May, after increasing by 4.5% in the previous month (analysts had expected 2.0%). Investment loans for housing construction fell by 1.3%, after increasing by 5.3% in the previous month. Investors are also evaluating the US labor market data for June released on Friday: the number of newly created jobs in the non-agricultural sector decreased from 218.0k to 206.0k (the forecast was 190.0k). Investors were alerted that the figure for May was sharply revised downwards from 272.0k to 218.0k. Average hourly wages fell year-on-year from 4.1% to 3.9% (year) and from 0.4% to 0.3% (month), while the unemployment rate rose from 4.0 percent to 4.1 percent. Tomorrow, the National Australia Bank's consumer confidence and business situation index will be published, as well as a speech by US Federal Reserve Chairman Jerome Powell to the US Congress: As expected, the monetary authority will devote part of his speech to Friday's labor market report.

USD/JPY

The USD/JPY currency pair is recording moderate losses, continuing the corrective momentum that was formed last week when the instrument fell from its record highs of 162.00: quotes are testing the 160.50 level for a downward break as traders analyze macroeconomic statistics from Japan and Friday's US labor market report. The number of new jobs created by the US economy outside the agricultural sector in June fell from 218.0 thousand to 206.0 thousand, which was, however, better than forecasts of 190.0 thousand. Importantly, the figure for May was revised sharply downward from 272.0 thousand. Average hourly earnings fell from 4.1% to 3.9% in June, while the unemployment rate was adjusted from 4.0% to 4.1%. Overall, the data was mixed, but it has the potential to put additional pressure on the Federal Reserve to launch a program to reduce borrowing costs. Investors still expect one or two 25 basis point rate cuts by the end of 2024, starting with the regulator's September meeting. However, many traders are concerned that the US presidential election scheduled for November may also influence officials' decisions. In Japan, statistics on wage dynamics were presented today: in May, the indicator rose from 1.6% to 1.9%, while analysts expected 2.1%. In addition, bank lending accelerated from 2.9% to 3.2% in June, exceeding the expected 3.1%. Eco Watchers' current situation index rose from 45.7 to 47.0 points in June, while the outlook rose from 46.3 to 47.9 points.

XAU/USD

The XAU/USD tool is consolidating near 2385.00 during the morning, waiting for new drivers for further price movement: At the end of last week, quotations recorded rapid growth after updating the local highs of May 22 following the release of the June report on the US labor market. Investors paid attention to the revision of the number of jobs created by the economy outside the agricultural sector in May from 272.0 thousand to 218.0 thousand, while in June the figure fell to 206.0 thousand against a forecast of 190.0 thousand. In addition, the unemployment rate fell from 4.0% to 4.1% and the rate of hidden unemployment remained unchanged at 7.4%, while the average hourly wage decreased from 4.1% to 3.9% year-on-year and from 0.4% to 0.3% month-on-month. Overall, labor market statistics reinforced expectations of monetary easing by the end of 2024. Market participants expect the US Federal Reserve to take the first steps in this direction in September. XAU/USD quotes are also supported by the results of the parliamentary elections in the EU. The vote in the UK ended with a historic victory for the Labour Party, which, according to some experts, can accelerate the pace of economic reforms aimed, among other things, at reducing fiscal spending. In France, the New Popular Front received 182 seats in the National Assembly. Marine Le Pen's right-wing Rassemblement Nationale party took only third place (143 mandates), despite being in the lead in the first round. The coalition of current French President Emmanuel Macron is in second place, having received 168 mandates.