The Dollar Index (DXY) ended the first day of July at 105.82, slightly below Friday’s 105.87, senior FX strategist at DBS Philip Wee notes.

USD fears a weaker US monthly jobs report 

“DXY’s most significant component, the Euro (EUR), initially spiked and met resistance at 1.0776 (50-DMA) on the far-right National Rally party failing to secure an outright majority at the first round of the French elections on Sunday. EUR/USD ended Monday at 1.0740, back inside the 1.0650-1.0750 range seen in the second half of June.”

“Similarly, DXY has been consolidating in a 105.3-106.2 range since June 21. While the EUR fears the second round of the French elections (on July 7) will produce a far-right government or a hung parliament, the USD is wary of a weaker US monthly jobs report (on July 5) opening the door increasing the market’s bet for the Fed to lower rates in September.”

“GBP/USD has been within 1.26-1.27 over the past week amid more clarity about the UK elections on July 4, producing a majority government led by the opposition Labour Party.”