From Marc Chandler at Bannockburn Global Forex:
Overview: The US dollar is firm. The only G10 currency that is stronger today is sterling, which is recovering from yesterday's sharp losses and the UK's drama eased following Prime Minister Starmer's support for Chancellor Reeves. Of note most of the final June PMI readings were revised higher from the initial estimates. The US struck a trade agreement with Vietnam, the third deal reached, and the clear intent is to deter it from re-exporting Chinese goods. Meanwhile, the US also lifted export requirement for chip design software sales to China, which would seem to imply that the administration is satisfied with the resumption of rare earth and magnet shipment to the US.
Most emerging market currencies are firmer today, led again by the Taiwanese dollar (~0.65%). On the other hand, the South Korean won is the weakest (~-.45%). South Korea's Kospi, on the other hand, rose 1.3% today to lead the Asia Pacific bourses higher, while Taiwan gained slightly less than half as much. Hong Kong shares fell the most (~0.65%) in the region. Europe's Stoxx 600 is up about 0.25% to extend yesterday's gain but is still nursing a small loss for the week. US index futures are virtually flat. UK Gilts lead the European bond market recovery today. The 10-year Gilt yield is off around 8 bp to 4.52%, while the other regional bond yields are off around three basis points. The 10-year US Treasury yield is almost two basis points softer at 4.26% ahead of the US employment report. Gold edged up to almost $3366 before meeting sellers that knocked it back to $3343 before support was found. August WTI is consolidating yesterday's 3% rally. It reached nearly $67.60 yesterday and is almost a buck lower now.
USD: Even after the disappointing ADP private sector jobs estimate (-33k vs. median forecast in Bloomberg's survey of a gain of 98k), the Dollar Index made a new session high yesterday near 97.15. Only after European markets close, it sulked back to almost 96.75. Ahead of the US employment report...
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