The British pound declined with the opening of the European market on Thursday against a basket of major currencies, resuming its losses after a brief pause against the US dollar and nearing a two-month low, amid concerns that UK labor market data may reinforce signs of an economic recession.

The unexpected rise in core inflation levels in the UK for June renewed inflationary pressures on Bank of England policymakers, leading to a decline in expectations of a British rate cut in August.

The Price

• GBP/USD today: The pound dropped 0.3% to (1.3384$), down from the opening price of (1.3421$), after recording a session high at (1.3428$).

• On Wednesday, the pound rose 0.25% against the dollar — its first gain in nine sessions — as part of a rebound from a two-month low at 1.3365$.

UK Inflation

The Office for National Statistics said on Wednesday that the UK’s headline inflation rate rose 3.6% year-on-year in June, above market expectations for a 3.4% increase, and up from 3.4% in May.

Core inflation rose 3.7% in June, also higher than the expected 3.5%, and up from 3.5% in May.

The unexpected jump in prices has renewed inflationary pressures on Bank of England policymakers and may slow the pace of policy easing and rate cuts in the second half of the year.

UK Interest Rates

• Traders scaled back their bets on BoE rate cuts, now expecting less than 50 basis points of easing this year.

• Market pricing for a 25-basis-point rate cut in August dropped from 80% to 65%.

Andrew Bailey

Bank of England Governor Andrew Bailey told The Times on Monday that the direction of interest rates is “certainly downward.” In the interview, he signaled that the Bank would accelerate its rate-cutting pace if further signs of “slack” emerged in the economy.

“Slack” refers to an economic condition where the economy is not operating at full capacity, characterized by rising unemployment and slowing output. This is considered disinflationary and would strengthen the central bank’s confidence in inflation falling to 2.0% by 2026, as currently projected.

UK Labor Market

The upcoming UK labor market report, due later today, is equally critical for the pound, as it’s expected to provide further signs of labor market weakness.

There are growing indications that the job tax imposed by Rachel Reeves is burdening the labor market, with more job losses likely.

Traders are also struggling with the chaotic nature of UK labor market statistics, with some survey components now deemed unreliable.

A weak jobs report would provide further evidence to the BoE that the economic recession is unfolding, warranting additional rate cuts.

And as FX markets refocus on relative interest rates, a faster pace of BoE easing would weigh heavily on the pound.

The Australian dollar slid to a three-week low against its US counterpart in Asian trading on Thursday, as open selling accelerated following gloomy labor market data out of Australia.

The data showed that the country's unemployment rate rose to its highest level in three and a half years, with fewer jobs added than expected in June. This marked the latest sign of slowing economic growth in Australia and increased the likelihood of a rate cut by the Reserve Bank of Australia in August.

The Price

• AUD/USD today: The Australian dollar dropped by 0.9% to (0.6473), its lowest level since June 24, down from the day’s opening level of (0.6553). It recorded a session high at (0.6533).

• On Wednesday, the Australian dollar rose 0.2% against the US dollar — its first daily gain in four sessions — following weaker-than-expected US producer price data.

Australian Labor Market

Figures released Thursday by the Australian Bureau of Statistics showed that the unemployment rate climbed to 4.3% in June, its highest level since November 2021, up from 4.1% in May and exceeding market expectations for a rise to 4.1%.

The Australian economy added around 2,000 new jobs in June, falling well short of market expectations for 21,000 jobs, after losing around 1,100 jobs in May.

The soft labor market is the latest indication of weak economic growth in Australia, which may prompt the Reserve Bank of Australia to ease monetary policy and cut interest rates.

Comments and Analysis

• IG analyst Tony Sycamore said: "There are clear signs of labor market weakness. This raises questions about the RBA’s decision to prioritize inflation over growth and employment at its meeting earlier this month."

• Sycamore added: "There’s no doubt the RBA will be keen to correct course at its August meeting."

• Harry Murphy Cruise, head of economic research at Oxford Economics Australia, stated: "While we’re not ringing alarm bells just yet, June’s slowdown is another solid reason for the RBA to move cautiously toward rate cuts."

Australian Interest Rates

• Following the labor market data, interest rate swap contracts now imply more than 50 basis points of easing by year-end.

• Market pricing for a 25-basis-point rate cut by the RBA in August rose from 76% to 85%.

• The RBA has cut rates twice since February, bringing the benchmark rate to 3.85%, as inflation has slowed into the target range of 2% to 3%.

Wheat prices rose on Wednesday in the Chicago Board of Trade, after the US Department of Agriculture (USDA) released its global forecasts for key crops for the 2025/26 marketing year, according to reports from the Ukrainian Agribusiness Club.

According to the USDA forecast, Ukraine’s wheat production for the 2025/26 marketing year will decline by 1 million tons to reach 22 million tons. Wheat exports are also expected to drop by 1 million tons to 15.5 million tons. As for corn, both production and export forecasts remained unchanged at 30.5 million tons and 15.5 million tons, respectively.

The global wheat market outlook for the 2025/26 marketing year points to a decline in supply (due to lower beginning stocks), an increase in consumption, a decrease in trade, and a drop in ending stocks.

Global wheat production for the 2025/26 marketing year remains unchanged at 808.6 million tons. However, output will fall in Canada (down 1 million tons to 35 million tons), Ukraine (down 1 million tons to 22 million tons), and Iran, while rising in Kazakhstan (up 1 million tons to 15.5 million tons), the European Union (up 0.7 million tons to 137.3 million tons), Pakistan, and Russia (up 0.5 million tons to 83.5 million tons).

Global consumption will rise by 0.8 million tons to reach 810.6 million tons, mainly driven by higher feed and residual use in Kazakhstan and Thailand.

Global trade will decline by 1.2 million tons to 213.1 million tons due to reduced exports from the European Union (down 2 million tons to 32.5 million tons) and Ukraine (down 1 million tons), partially offset by increased exports from Russia (up 1 million tons to 46 million tons) and the US (up 0.7 million tons to 23.1 million tons). Global ending stocks for 2025/2026 have been revised down by 1.2 million tons to 261.5 million tons, mainly due to reductions in Canada and the European Union.

Corn

Corn futures for December delivery rose by 1.1% at the close of the session to $4.24 per bushel.

Soybeans

Soybean futures for November delivery jumped by 1.8% to $10.20 per bushel.

Wheat

Wheat futures for September delivery settled 0.7% higher at $5.41 per bushel.

Ethereum recorded a 5.9% daily gain, reaching $3,155, supported by a 20.1% rise over the past week amid a growing wave of publicly traded companies accumulating the cryptocurrency in their treasuries.

This move pushed Ethereum’s price to its highest level since early February, according to CoinGecko data, and led to the liquidation of $85.4 million in short positions over the past 24 hours, according to CoinGlass.

Earlier this month, Minnesota-based SharpLink Gaming announced it had acquired $225 million worth of Ethereum, according to a press release issued Tuesday. The company had pivoted from online gambling marketing to Ethereum accumulation in May, after raising $425 million in funding and adding Ethereum co-founder and Consensys CEO Joseph Lubin to its board of directors.

With this move, SharpLink became the public company with the largest Ethereum treasury on the market, with its holdings reaching 280,000 ETH after the latest purchase — equivalent to $884 million at the current price. As a result, the company’s stock (SBET) has surged more than 1,000% since its pivot to crypto, according to TradingView.

Similarly, BitMine Immersion Technologies announced last month the establishment of its own Ethereum treasury. The Bitcoin mining company had raised $250 million in late June to build up an ETH reserve, with Tom Lee of Fundstrat joining as chairman of the board.

Since then, the company has purchased more than $500 million worth of Ethereum, and its stock (BMNR) has soared over 1,100% since the first ETH purchase, according to TradingView. In a notable development, Peter Thiel and his Founders Fund acquired a 9.1% stake in the company on Tuesday.

Bitcoin mining firm Bit Digital also announced last month that it had ceased mining operations to focus on Ethereum-based treasury and staking strategies. Last week, the company converted its entire reserves into Ethereum, reaching 100,603 ETH — valued at more than $316 million at today’s prices. Then on Monday, it announced a $67.3 million stock sale to purchase additional ETH.

Kevin Rasher, founder of the RAAC lending and borrowing ecosystem, said in a note shared with Decrypt: “Ethereum is no longer just a speculative tool — it’s now a yield-generating, programmable financial asset that institutions view as a store of value. This is a major factor supporting ETH’s price, as treasury allocations reduce circulating supply and reflect long-term confidence.”

These are just a few examples of a broader trend in the markets, where public companies are establishing crypto treasuries to boost their stock performance, drawing inspiration from Michael Saylor’s strategic approach to Bitcoin adoption.

For instance, Canadian company Cannabis Sativa rebranded itself as Dogecoin Cash before purchasing $3.5 million worth of Dogecoin.

More recently, a group of investors announced a $540,000 purchase of the Solana-based meme token Dogwifhat, with plans to take their company public via a reverse merger — a move aimed at riding the wave of institutional crypto investment.

At the time of writing, Ethereum was up 9.75% to $3,363.7 on CoinMarketCap as of 20:40 GMT.