North American FX Open - Dollar under pressure heading into NFPs

Traders returning from the Independence Day holidays in the US will find the DOLLAR still under considerable pressure, as the market waits for the all important US NFPs report. Overnight the Dollar index has slipped back below the 105.00 level for the first time since June 13th, as the negative effect of Wednesday's weak US services ISM continues to weigh.

The Fed's Williams admitted overnight that there was still a way to go before reaching the 2% inflation goal and that while inflation progress has been significant, the job is not done yet. Williams added that the US economy is still doing remarkably well.

Another day and another disappointing German data release, with industrial production in May falling by 2.5% compared to the consensus forecast for a rise of 0.1%.

Overnight ECB President Lagarde remarked that central bank requires additional reassurance that inflation is headed back to the 2% target before it lowers interest rates further.

Japan's household spending unexpectedly fell materially in May, at -1.8% y/y vs a 0.3% consensus, raising the likelihood that consumption won t be a key driver ofthe economy in Q2 and leading to fresh questions over the timing of a second BOJ rate hike.

In the UK General Election. Labour scored a landslide win, as expected, taking 412 seats of the parliament's 650 at the time of writing. Former PM Sunak has conceded defeat and also announced he will step down as leader of the Conservative Party. The markets have taken the expected result in its stride, with Cable rising to a three week high up at 1.2791, which is probably mostly to do with the Usd weakness.

The Aussie has taken advantage of the US unit's weakness to hit 0.6739 in Asian trade, which is a six month high.

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