The euro climbed above $1.16, rebounding from a seven-week low as markets increasingly expect the Fed to act faster and more decisively on rate cuts than the ECB. A softer U.S. July payrolls report and sharp downward revisions to previous data pushed the probability of a September Fed cut to 90%.

Gold hovered near a two-week high around $3,370 per ounce, supported by expectations of looser policy amid slowing momentum. The ISM Services Index missed July forecasts, signaling weaker growth, job losses, and rising price pressures. Other indicators also pointed to a cooling labor market and sluggish consumer demand.

In currency markets, the yen slipped to 147.7 per dollar after weak wage data highlighted Japan’s struggle with inflation outpacing income growth, casting doubt on BoJ tightening. The pound recovered to $1.328 but still posted its steepest monthly drop since September 2022 with ongoing concerns over the UK’s fiscal and economic outlook.

Meanwhile, the offshore yuan edged down to 7.19 per dollar as traders remained cautious, despite Trump suggesting the U.S. and China may extend the trade truce beyond the August 12 deadline, potentially delaying new tariffs and easing pressure on Chinese exports. Overall, global markets remain reactive to central bank signals, labor trends, and geopolitics in an increasingly uncertain economic environment.

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