The upcoming week will bring a fresh test for major currency pairs as investors return from the US Independence Day holiday and continue to digest weaker US labor market data. The release of the last Federal Open Market Committee (FOMC) minutes and Initial Jobless Claims will test the US Dollar's (USD) resilience.

The US Dollar Index (DXY) trades lower near the 100.90 price zone and is set to finish the week with a 0.50% loss. The Greenback will now focus on a relatively light but important United States (US) calendar. Monday will bring the final S&P Global Services PMI and ISM Services PMI, while Tuesday’s trade balance and Wednesday’s FOMC Minutes will be key. The minutes from the Fed’s June meeting, the first under Chair Kevin Warsh, may offer clues on whether policymakers remain committed to a restrictive stance.

EUR/USD trades on a higher note near the 1.1440 level and will likely remain driven by the contrast between softer US labor data and the European Central Bank’s (ECB) cautious stance. Germany and France's trade and industrial data will also be watched for signs of whether the recovery in activity can continue.

GBP/USD rose sharply by more than 1% this week, trading near 1.3350 and is poised to remain sensitive to broader USD direction. If the FOMC Minutes show concern over the labor market, the pair may find support.

USD/JPY trades near the 161.40 level after hitting a 40-year high of 162.84 earlier this week. The Japanese Yen may struggle if the US Dollar keeps rising, but softer US data could limit the pair’s upside if markets price in a less restrictive path for the Fed. Intervention risks may also stay in focus if USD/JPY remains near multi-decade highs.

AUD/USD trades near the 0.6940 price zone and will watch China-related sentiment and the broader USD trend. The Aussie recently found support from stronger Australian PMIs and resilient Chinese services activity.

West Texas Intermediate (WTI) Oil trades near $68.80 per barrel. The black gold will remain sensitive to supply expectations, geopolitical risks, and the upcoming OPEC+ meeting. Recent declines in Oil prices back toward pre-war levels have reduced some inflation fears, but any change in supply guidance could quickly revive volatility across energy markets.

Gold (XAU/USD) trades higher near the $4,175 level and may continue to benefit if US yields fall and the Fed minutes strengthen expectations that the central bank may not keep policy restrictive for much longer. However, a stronger US Dollar rebound could limit upside momentum for the precious metal.

Anticipating economic perspectives: Voices on the horizon

Monday, July 6

• Fed Governor Waller
• BoE’s Mann
• ECB’s Schnabel
• ECB President Lagarde
• ECB’s Lane

Tuesday, July 7

• BoE’s Mann

Wednesday, July 8

• RBA’s Hunter

Thursday, July 9

• BoE’s Breeden
• ECB President Lagarde
• ECB’s Cipollone

Friday, July 10

• ECB President Lagarde
• ECB’s Vujčić

Central bank meetings and policy decisions

The main policy decision next week will be the RBNZ Monetary Policy Review and OCR announcement on Wednesday, July 8, with the online media conference also scheduled later that day. The FOMC Minutes from the June 17 meeting will also be released on Wednesday, while the ECB account of its June policy meeting is due on Thursday. The BoE Financial Stability Report and FPC Record will be published on Tuesday. No major interest rate decisions are scheduled from the Fed, ECB, BoE, BoJ, RBA, or BoC during the week.