European ministers will meet Iran’s counterpart in Geneva on Friday, alongside EU diplomat Kaja Kallas, to discuss Iran’s nuclear program, with U.S. coordination but without Trump’s hardline influence, potentially easing compromise. The ECB, after a June rate cut, is cautious, with markets expecting just one more cut in 2025, while the U.S. anticipates two, supporting the euro. The EU plans to boost defense spending by cutting regulations, aiming to speed up project approvals and stimulate the economy, further strengthening the euro. ECB President Lagarde promotes the euro as a global reserve currency alternative, while ECB members Villeroy and Panetta emphasize stable 2% rates, controlled inflation, and risks from U.S. trade policies and Middle East tensions, with July’s ECB meeting hinging on U.S. trade talks.

Japan will release its inflation data early Friday, with core CPI expected to hit 3.7%, marking three months of rising inflation, driven by higher service and food prices as companies pass on increased labor costs. Persistent high inflation may push the Bank of Japan to raise interest rates, though concerns about U.S. tariffs impacting growth remain. Japan’s failure to secure a trade deal with the U.S. at the G7 summit raises recession risks, but President Trump hinted at a possible agreement before the July 9 tariff deadline, aiming to score economic wins ahead of the 2026 midterms.

At the G7 summit, Australian Prime Minister Anthony Albanese met with EU leaders Ursula von der Leyen and Antonio Costa to discuss strengthening trade and security ties, emphasizing their importance amid global protectionism. Despite a failed 2018-2023 free trade agreement attempt, Albanese remains optimistic about reaching a new deal. Australia’s May employment data showed a surprising dip of -2.5k jobs against a forecast of 21.2k, but full-time jobs rose, and the unemployment rate held steady at 4.1%, signaling labor market resilience. The Reserve Bank of Australia expects unemployment to peak slightly higher at 4.3%, with no significant shift in monetary policy easing expectations.