US FX WRAP: Dollar gains ahead of NFP; EUR & AUD lag

USD kept a bid ahead of NFP on Thursday, brought forward a day on account of Independence Day on Friday. Ahead of the report, which is expected to see 110k jobs added to the economy, ADP printed 98k private payroll growth, shy of the expected 110k; Revelio printed 259k overall. Meanwhile, US challenger layoffs eased to 45.85k from 97k, with cuts remaining concentrated in tech; ISM mfg PMI missed expectations but saw a welcome drop in the prices component. The dollar was largely muted through the data releases, though it did see strength trim once Fed Chair Warsh spoke at Sintra. No remark(s) in particular drove the pullback, but rather the overall tone failed to prove as hawkish as expected after his inaugural FOMC press conference. DXY hit highs of 101.595 before retreating to ~101.40.

G10 FX were generally in the red against USD, led by EUR and AUD. GBP managed to see slight strength, albeit not without intra-day weakness, in response to BoE Governor Bailey. He noted that the softening economy and labour market were the reasons not to raise rates. Cable hit a low of 1.3219 on the remarks before reversing the move to high highs of 1.32794.

Mild EUR pressure was seen on the EZ HICP report, which came in below expectations and cooled from the prior on all gauges. ECB's Demarco and Stournaras seemed fine with where policy stands for the time being, with ECB's Wunsch arguing they would need stronger second-round effects to justify further tightening. EUR/USD hit lows of 1.1362, narrowing the gap between the June low of 1.1325.