• The US Dollar trades lower against its major peers ahead of the US NFP data for June.
• Investors will pay close attention to the US Average Hourly Earnings data.
• Fed’s Warsh stresses the need to bring price stability, warning that inflation is too high.

The US Dollar (USD) underperforms its major currency peers ahead of the United States (US) Nonfarm Payrolls (NFP) data for June, which will be published at 12:30 GMT.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, is down 0.4% to near 101.00.

Investors eagerly await the US NFP data as its impact on the Federal Reserve’s (Fed) interest rate expectations is expected to be significant, knowing that Chairman Kevin Warsh is least interested in providing forward-looking guidance regarding the monetary policy outlook.

“Absent, also, is so-called forward guidance—which we agreed was not well suited to the current policy conjuncture,” according to the transcript of Fed Chairman Warsh’s June meeting press conference.

According to estimates, US employers hired 110K fresh workers in June, lower than 172K in May. The Unemployment Rate is expected to remain steady at 4.3%.

Average Hourly Earnings, a key measure of wage growth, is estimated to arrive at 3.5% Year-on-Year (YoY), higher from 3.4% in May, with monthly figures rising steadily by 0.3%.

Investors will pay close attention to the wage growth measure as it impacts inflation projections significantly. On Wednesday, Fed Chair Kevin Warsh warned at the European Central Bank (ECB) Forum in Sintra that inflation remains “too high”, while stressing the need to bring price stability. As expected, Warsh didn’t offer any cues regarding the Fed's future decisions on interest rates; however, the way he stressed easing inflationary pressures indicated that he would be slightly on the hawkish side.

Warsh rejects forward guidance but doubles down on 2% inflation goal

Fed Chair Warsh delivers a moderately hawkish message, with a FXS Speechtracker score of 5.6/10 that cannot be benchmarked relative to the historical average but still signals a clear focus on price stability. The refusal to provide forward guidance, coupled with the insistence that the Fed will “chart a new course” and decide whether the AI boom is inflationary, underscores a data-dependent, flexible stance that keeps the Dollar sensitive to incoming inflation and labor data. Warsh’s emphasis that inflation above 2% will disappoint the Fed, alongside comments on steady labor markets and a solid supply side, reinforces a bias toward maintaining or tightening policy if price pressures re-emerge.

The FXS Fed Sentiment Index was unchanged, moving 0.00 points to a still-hawkish level of 123.64, confirming that the speech did not materially shift the broader policy tone captured by the FXS Speechtracker. With the index firmly above 100, the Fed remains in hawkish territory, and Warsh’s rejection of forward guidance while stressing independence and the 2% target keeps the Dollar supported by expectations of a vigilant policy stance.