Euro rose in European trade on Monday against a basket of major rivals, starting to recover from a two-week trough against the pound, with the market still expecting the European Central Bank to raise interest rates by 25 basis points this month.

Investors also await a variety of important data on the UK, which will help determine the likely path ahead for monetary policies. 

EUR/GBP rose 0.4% to 0.8573, with a session-low at 0.8532, after losing 0.1% on Friday, resuming losses back then to near a two-week low at 0.8520.

Euro lost 0.55% last week against the pound, the first weekly loss in three weeks on concerns about a widening policy gap between Europe and the UK as Bank of England continues to aggressive raise interest rates.

ECB

Euro await ECB President Christine Lagarde's speech later this week in addition to remarks by several other ECB officials to gauge the likely path ahead for European monetary policies. 

UK Economy

Later this week, a batch of important UK labor and GDP data will be released.

Such data will provide fresh pricing for Bank of England's next policy move at the August meeting. 

Gold prices fell in European trade, resuming losses and moving once again in a negative zone as dollar rebounded against most major rivals.

Despite weak US labor data in June, markets continue to price in a 0.25% Fed rate hike at the July meeting, ahead of US inflation data later this week.

Gold Prices Today

Gold prices fell 0.3% to $1,919 an ounce, with a session-high at $1,928, after rising 0.75% on Friday, the first profit in three days following US payrolls data.

The US economy added 209 thousand new jobs in June, missing estimates of 224 thousand. 

US unemployment fell to 3.6% in June from 3.7% in May, while average wages rose 0.4% in June, passing estimates of 0.3%.

The Dollar

The dollar index rose 0.25% on Monday away from two-week lows at 102.22, on track for the first profit in three sessions against a basket of major rivals.

Dollar's recovery could push gold prices down and makes gold futures costlier to holders of other currencies.

US Rates

Current pricing for a 0.25% Fed rate hike in July stands at 92%.

Now markets await US inflation data in June and remarks by several Fed officials to determine the likely decision ahead for the Federal Reserve.

The SPDR

Gold holdings at the SPDR Gold Trust fell 2.6 tones on Friday to a total of 915.26 tones, the lowest since March 15.

Sterling declined in European trade against a basket of major rivals, backing off 15-month high against dollar and on track for the first loss in three days on profit-taking.

Investors await Bank of England Governor Andrew Bailey's speech later today, which might include strong signals on the future path of policy tightening in the UK. 

GBP/USD fell 0.3% to 1.2798, with a session-high at 1.2842, after rising 0.8% on Friday, the second profit in a row, marking the largest profit since June 15, while scaling a 15-month peak at 1.2850 following weak US data. 

The pound rose 1.1% last week against dollar, the first weekly profit in three days as dollar weakened against a basket of major rivals.

Bailey

BoE Governor Andrew Bailey is expected to speak about the future monetary policies and the UK and the expected interest rate hikes this year. 

Estimates

It's expected the UK current account deficit will decline, in turn providing some protection to the pound against its major rivals. 

Most US stock indices gained ground on Friday following US payrolls data for June.

Slower Growth

The US economy added the least amount of jobs since December 2020, showing the labor market has tightened far enough already. 

The US economy added 209 thousand new jobs last month, missing estimates of 230 thousand.

May's reading was revised to show an addition of 306 thousand jobs instead of 339 thousand.

US unemployment fell to 3.6% in June from 3.7%. 

Working hours rose by 0.1 hours to 34.4 hours in June, while average hourly wages rose 0.4% m/m, or 12 cents to $33.58. 

Fed Policies 

Most Fed officials signalled further policy tightening to come, but in a slower pace compared to before, according to the Fed's latest meeting minutes.

Policymakers decided to maintain interest rates unchanged last month on concerns about economic growth, even as most members expect more interest rate hikes to come.

FOMC members expressed their concerns about inflation and employment rates, and preferred to take stock and pause policy tightening to monitor the situation.

The decision to pause policy tightening came as policymakers preferred to monitor the impact of policy tightening on the economy.

On trading, Dow Jones fell 0.1%, or 50 points as of 16:44 GMT to 33,870, while S&P 500 added 0.1%, or 3 points to 4,414, while NASDAQ climbed 0.3%, or 43 points to 13,721.