USD Outlook:
• Too early to call ‘peak bearishness’ on the dollar.
• Fed Chair Powell resists rate cut pressure, but today’s US Jobs Report (+106k expected) is crucial.
• A weak report could shift market bets towards a July rate cut (currently 26% probability).
• Watch for sub-96 levels on DXY if NFP disappoints.
EUR Strength – ECB Getting Nervous:
• ECB officials express concern over rapid euro appreciation.
• Strong euro risks CPI undershooting 2% target.
• Despite concerns, EUR/USD remains well-supported, next resistance seen near 1.1900 if NFP misses expectations.
GBP under Political Pressure:
• Sterling tumbled on fears over Chancellor Reeves’ future.
• PM Starmer eventually reaffirmed support, calming markets.
• Fiscal credibility remains in question as Labour policy unfolds.
• Focus now on potential BoE signals regarding QT slowdown in September.
What’s Next?
• Markets are walking a tightrope between politics and data. Today’s US NFP release could define dollar direction for weeks. Meanwhile, euro momentum remains strong, and the UK faces political and fiscal uncertainty
US Eases Chip Software Export Restrictions to China As Trade Deal Is Implemented; Markets Look to Jobs Report As Labor Slowdown Gains Momentum; Tesla Production Rises, Sales Fall
• The Trump administration has lifted export license restrictions on selling chip design software to China, the implementation of a new trade deal to reduce export limits on sensitive technology between Beijing and Washington. Key vendors like Synopsys, Cadence Design Systems, and Siemens AG are now restoring complete access to technology and software for Chinese purchasers, rolling back the May restrictions. The move followed an agreement under which the US would allow the export of EDA software, ethane, and jet engines in exchange for a commitment from China to accelerate export approvals for the most critical rare earth minerals.
• Meanwhile, US stock futures held steady as Wall Street waits for the June jobs report. Markets are expecting another deceleration in the labor market, with the jobless rate rising to a 3-1/2-year high of 4.3% as economic uncertainty due to Trump’s policies takes hold. Despite this, major US equity indexes, the S&P 500 and Nasdaq Composite, held records on Wednesday on optimism regarding other US trade deals (such as with Vietnam) and in anticipation of a weakening jobs market that would further enhance the case for Federal Reserve interest rate reductions.
• In individual company news, shares of Apple climbed following an analyst upgrade, and shares of Tesla climbed following the electric vehicle manufacturer announcing that it made more vehicles than anticipated in Q2 even as sales fell. However, President Trump’s massive spending bill halted in the House after clearing the Senate narrowly, with House Speaker Mike Johnson requesting passage by July 4 this Friday.

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