USD

The dollar is slumping again today after a lower-than-anticipated Non-Farm Payrolls report, putting the greenback at risk of closing the week in the red.

In June, the U.S. economy saw a modest growth of 209,000 jobs, representing the lowest increase since December 2020. It was also below the expected 225,000 growth, making it the first Non-Farm Payroll miss in over a year. The result will disappoint traders coming off yesterday's excellent ADP employment beat.

In addition, the unemployment rate saw a slight decline to 3.6%, indicating a robust U.S. labor market. Moreover, average hourly earnings for workers displayed a positive trend, rising by 0.3% in May and reflecting a noteworthy 4.3% increase over the past 12 months.

EUR

The euro is up 0.3% this morning as markets respond to the latest batch of key data releases in Europe and the United States. As the U.S. session kicks off, EUR/USD is clinging to 0.1% gains on the week.

Earlier today, Germany posted an unexpected 0.2% decline in industrial production for May. While sectors like pharmaceuticals and energy experienced decreased output, there was a noteworthy 4.9% increase in motor vehicle manufacturing. In addition, the annual growth rate slowed to 0.7% compared to the 1.7% growth seen in April.

Meanwhile, Italy experienced a noteworthy 0.7% month-on-month increase in retail sales in May, driven by robust demand for non-food goods, while the annual retail activity growth came in at 3% - slightly cooler than the 3.2% posted in April.

GBP

The pound is up around 0.4% on the day as it looks to close the week in the green following two consecutive weeks of losses.

On the data front, the UK's Halifax house price index experienced a substantial 2.6% annual decline in June, the largest in twelve years, primarily influenced by rising interest rates and inflation. Existing property prices sustained their most significant reductions since August 2009, dropping by 3.5%. Meanwhile, new-build house prices saw their lowest increase in over three years.

In addition, the UK's labor productivity declined by 1.4% in Q1 2023, the first decrease since Q1 2022, while also experiencing an annual contraction of 0.6%.

JPY

The yen is on pace for its first winning week in a month as traders analyze overnight data from Japan while taking in this morning's US Non-Farm Payrolls release.

A fresh look at Japan's average cash earnings indicator showed a significant year-on-year increase of 2.5% in May, surpassing expectations and reflecting major companies' efforts to meet worker demands. However, despite the wage growth, inflation-adjusted real wages declined due to the higher consumer inflation rate of 3.2%.

Meanwhile, Japan's Leading Economic Index rose to 109.5 in May, the highest level since November 2022, indicating expectations of continued momentum in the economy following stronger-than-expected Q1 growth.

CAD

After posting back-to-back losing days, the loonie is up around 0.3% against the dollar this morning after a double dose of US and Canadian jobs data earlier today.

Canada's unemployment rate rose to 5.4% in June, its highest level since February 2022, potentially indicating some softening in the labor market. However, it was just the second monthly increase since last August. An increase in the labor force mainly drove the uptick in unemployment.

Despite the rise in the unemployment rate, the Canadian economy added 60,000 jobs, surpassing expectations, driven by gains in full-time employment across industries such as wholesale and retail trade, manufacturing, and health care.

MXN

The Mexican peso is higher on the day after dropping around 1.3% against the dollar yesterday. The moves come after the release of the latest Banxico meeting yesterday, which indicated that the bank is in no rush to begin rate cuts, reiterating that rates will remain at 11.25% for an extended period to help bring inflation back down to the 3% target.

Earlier today, June inflation data out of Mexico indicated a drop in annual consumer price index (CPI) for the fifth consecutive month, coming in at 5.06%, the lowest since March 2021. The annual core CPI rate also decreased, reaching 6.89%. However, despite the progress, inflation remains above Banxico's 3% target.

BRL

It has been a tough week for the Brazilian real, down over 2% on the week so far and pacing for its worst weekly performance since mid-April. However, BRL is in the green this morning thanks to a weaker dollar.

Much of the week's losses came yesterday after a stellar US ADP employment report left markets thinking the Fed may stay hawkish on rates longer than anticipated, weighing on BRL and many of its LATAM counterparts that have reached the end of their tightening cycles.

Brazil's Central Bank, in particular, appears on the verge of cutting rates, with markets anticipating the first cut could come as soon as next month. Furthermore, current market pricing indicates Brazil's key Selic rate will decline from 13.75% to 12% by year-end.

CNY

The yuan is inching higher this morning after the PBoC again set a stronger-than-expected CNY fix in the onshore market, reaffirming to traders its commitment to prevent excessive yuan depreciation.

Meanwhile, reports suggest that the long-awaited fiscal stimulus package from the Chinese government may be unveiled later this month at the next Politburo meeting later this month.

However, investors remain skeptical about the extent of the measures given the CCP's traditionally cautious approach to such actions.

Looking ahead, China's June CPI data is set for release Sunday evening with expectations for a 0.2% year-on-year increase from the May print, while the monthly inflation rate is projected to come in flat.