USD gains peaked at 0.4% ahead of yesterday’s North American session, falling through the remainder of the day to close just 0.15% higher. April’s JOLTS employment report showed US job openings fell to their lowest level in more than three years, driving Treasury yields lower for a fourth straight day.

The USD swung between gains and losses overnight, entering today’s North American session marginally higher. Following yesterday’s data miss on the JOLTS release, today’s ADP employment data for May also missed estimates, coming in at 152k private payroll job additions versus the 175k forecasted. Elsewhere, China’s non-official (private survey) services PMI reading accelerated at the fastest pace in 10 months.

EUR/USD fell 0.2% yesterday and is slightly lower today, trading roughly 0.2% higher than this time last week. Today’s PPI data showed input and output prices at factories fell more than expected. ECB Governing Council member and head of the Slovakian central bank, Peter Kazimir, said, “Inflation is on a good trajectory, and I believe we are approaching the first reduction in interest rates by the ECB.” ECB member Panetta emphasized that his counterparts should not fear diverging monetary policy from that of the US Fed, viewing easing not as a stimulus but rather as preventing policy from becoming "excessively tight.” The ECB rate decision tomorrow is currently 99% priced for a rate cut, as implied by swap odds.

GBP/USD lost 0.30% yesterday and is slightly higher today, trading about 0.25% higher than this time last week. Today’s UK services PMI data met expectations, with the composite reading slightly beating expectations. The inflation component of the services sector dropped to its lowest in over three years. Investors await key employment and wage data next Tuesday. Implied swap odds have the first rate cut fully priced in by the BOE’s November decision.

USD/CAD gained 0.35% yesterday and is trading flat compared to yesterday’s close, trading at roughly the same level as this time last week. Q1 labor productivity fell 0.3% on expectations of a 0.1% decline. The BOC rate decision is at 9:45 AM, followed by a press conference. Implied swap odds suggest over a 75% chance of the BOC delivering its first rate cut of the cycle. Recent softness in activity data, coupled with the fact that inflation readings are now below the upper band (3%) of their inflation target, are conditions seen to allow the BOC to act today.

USD/BRL rose over 0.5% yesterday, trading to its highest level since March of 2023, amidst broad risk-off moves. Deteriorating fiscal conditions, rising inflation expectations, economic drag from recent flooding in the south of the country, and upcoming changes to its central bank’s board are drivers of investor caution and, as a result, continued underperformance versus its peers. Industrial production data missed expectations this morning. The next BCB rate decision is on June 19.