The euro is expected to recover against the dollar as eurozone fiscal stimulus takes effect by year-end. Recent Eurozone data shows rising producer prices, suggesting the ECB will maintain a cautious, data-dependent approach to rate cuts, potentially supporting the euro. Meanwhile, a weaker U.S. jobs report has raised speculation that the Federal Reserve might cut rates by 50 basis points in September, highlighting diverging monetary policies between the Fed and the ECB. ECB official Christodoulos Patsalides noted the eurozone’s resilience, with 0.1% growth in Q2, despite global uncertainties, and emphasized that ECB policy will remain flexible due to high uncertainty.

Japan’s trade negotiator, Ryosei Akazawa, is pressing the U.S. to quickly implement a recent trade deal, focusing on lowering tariffs on Japanese cars and parts, though the timeline remains vague and the lack of a formal agreement raises concerns about enforceability and potential disputes. The Bank of Japan’s June meeting minutes highlight the risks of U.S. tariffs but affirm plans for rate hikes if trade tensions don’t escalate, with market attention on the upcoming July meeting summary for fresh policy insights. Mitsubishi UFJ’s CEO, Hinori Kamezawa, supports a BOJ rate hike due to strong inflation and labor shortages, while a government panel’s proposed 6% minimum wage increase—the largest since 1978—signals a sustained wage-price cycle. June wage data shows nominal earnings up 2.5%, the fastest in four months, but real earnings fell 1.3% due to inflation, reinforcing the BOJ’s confidence in its rate-hiking path.

Australia’s household spending grew 4.8% year-on-year in June, the fastest since January 2024, but monthly growth slowed to 0.5%, below the expected 0.8%. Higher costs and waning post-rate cut effects moderated spending, with clothing, furnishings, recreation, and miscellaneous goods driving the increase. Discounting boosted spending, but cooling migration and global demand pressures may weaken momentum, especially given Australia’s high household debt. Markets anticipate two rate cuts in 2025, but the Reserve Bank of Australia is expected to remain cautious, with cuts likely only if economic data, particularly unemployment, worsens significantly.