The Australian Dollar (AUD) is up against its major currency pairs, trading 0.23% higher to near 0.6940 against the US Dollar (USD) during the European trading session on Friday. The Aussie pair gains as a slight decline in hawkish Federal Reserve (Fed) prospects has lifted market sentiment.

Commerzbank’s Charlie Lay and Dr. Henry Hao note that weaker US non-farm payrolls and reduced Fed rate hike expectations weighed on the Dollar, supporting the Japanese Yen. USD/JPY fell sharply as markets priced a smaller cumulative hike by year-end and speculated about possible FX intervention.

The Japanese Yen (JPY) has staged a sharp recovery against the US Dollar, surging from a 40-year low at around 162.50 down to the 160-61 handle. 

ING’s Francesco Pesole highlights that EUR/USD price action after the US jobs report underlines the lack of a strong bullish narrative for the Euro, as markets doubt further ECB hikes. Softer inflation and low Oil prices weigh on expectations.

The USD/CAD pair reflects a subdued performance near 1.4175 during the European trading session on Friday. The Loonie pair edges lower as the US Dollar (USD) faces selling pressure due to easing hawkish Federal Reserve (Fed) prospects.

UOB’s Quek Ser Leang notes that AUD/USD’s abrupt jump to 0.6943 was not sustained, leaving the pair likely to consolidate between 0.6895 and 0.6945 in the near term.

The USD/JPY pair turns lower for the second straight day following an intraday uptick to mid-161.00s and drops to a more than two-week low during the first half of the European session on Friday.

Commerzbank’s Charlie Lay and Dr. Henry Hao note that weaker US non-farm payrolls and reduced Fed rate hike expectations weighed on the Dollar, supporting the Japanese Yen. USD/JPY fell sharply as markets priced a smaller cumulative hike by year-end and speculated about possible FX intervention.

The British Pound (GBP) appreciates against the US Dollar (USD) on Friday, on track for a 1.3% appreciation this week, its strongest weekly performance in three months.

Eurozone HCOB Composite PMI above expectations (49.5) in June: Actual (50)

Eurozone HCOB Services PMI above forecasts (48.9) in June: Actual (49.4)

Germany HCOB Services PMI came in at 48.6, above expectations (46.8) in June

Germany HCOB Composite PMI above expectations (48) in June: Actual (49.5)

The Euro (EUR) is up 0.16% to near 1.1455 against the US Dollar (USD) during the European trading session on Friday. The EUR/USD pair gains as the US Dollar underperforms its peers due to a slight ease in hawkish Federal Reserve (Fed) interest rate expectations.

France HCOB Services PMI registered at 46.8, below expectations (47.4) in June

France HCOB Composite PMI came in at 47.2 below forecasts (47.6) in June

Italy HCOB Services PMI below expectations (50.5) in June: Actual (50.2)

The GBP/JPY cross attracts fresh sellers in the vicinity of mid-215.00s and slides to the lower end of its daily range during the early European session on Friday.

The Euro (EUR) remains stalled right above one-year lows against the British Pound (GBP) on Friday.

According to UOB’s Quek Ser Leang, GBP/USD’s strong six-day advance to 1.3385 looks overstretched, but there is still scope for a retest of 1.3385 in the near term, with support at 1.3325/1.3300.

MUFG’s Michael Wan notes that softer US non-farm payrolls and suspected FX intervention supported the Japanese Yen, pushing USD/JPY sharply lower. He highlights that weaker payrolls reduce the likelihood of a near-term Fed rate hike but do not clarify the broader labour and inflation outlook.

Here is what you need to know on Friday, July 3:

Silver price (XAG/USD) jumps to the weekly high near $62.15 during the early European trading hours on Friday. The precious metal extends the rally as a weaker-than-expected US Nonfarm Payrolls ‌(NFP) report has reduced expectations of Federal Reserve (Fed) interest rate hikes this year.

The NZD/USD pair posts a fresh weekly high at around 0.5725 during the European trading session on Friday. The Kiwi pair reflects strength as risk-on market sentiment due to a slight cool down in hawkish Federal Reserve (Fed) expectations has improved the appeal of antipodeans.

Commerzbank’s Tatha Ghose expects Turkey’s June Consumer Price Index (CPI) to show a modest disinflation surprise, with headline and core rates easing slightly and month-on-month inflation potentially below 1%.

The Australian Dollar (AUD) appreciates for the second consecutive day against a weaker US Dollar (USD) on Friday, still weighed by Thursday’s US Nonfarm Payrolls’ disappointment.

UOB’s Quek Ser Leang highlights that EUR/USD failed to extend gains after spiking to 1.1472 and is now expected to consolidate between 1.1410 and 1.1455 intraday.

EUR/JPY rises after two days of losses, trading around 184.50 during the Asian hours on Friday.

The USD/CAD pair struggles to capitalize on the previous day's modest bounce from a nearly two-week low and turns lower for the second straight day following a modest Asian session uptick to the 1.4200 neighborhood.

The Indian Rupee (INR) opens slightly higher against the US Dollar (USD) on Friday. The USD/INR pair drops to near 95.26 due to broader underperformance in the US Dollar, following the release of the weak United States (US) Nonfarm Payrolls (NFP) data for June on Thursday.