Forex Today: UK goes to polls, US Dollar remains fragile on Independence Day

Here is what you need to know on Thursday, July 4:

The US Dollar (USD) seems to have stabilized after suffering large losses against its rivals on Wednesday. Financial markets in the US will remain closed in observance of the Independence Day holiday on Thursday. The economic calendar will not offer any high-impact data releases but investors will keep a close eye on the United Kingdom exit polls as voters cast ballots in a snap general election called by Prime Minister Rishi Sunak.

Following the announcement of the snap election in the UK, opinion polls consistently showed that the main opposition Labor Party is projected to win a landslide, with Sir Keir Starmer becoming the new Prime Minister. Exit polls are expected to be announced shortly after voting ends at 22:00 local time (21:00 GMT). The final outcome is likely to be confirmed in the early morning hours on Friday.

On Wednesday, disappointing macroeconomic data releases from the US caused the USD to face strong selling pressure. The ADP reported that the private sector payrolls grew 150,000, below the market expectation of 160,000, and the ISM Services PMI slumped to 48.8 in June from 53.8 in May, pointing to a contraction in the service sector's business activity. The USD Index declined sharply in the American session and came within a touching distance of 105.00 before staging a technical correction. At the time of press, the index was fluctuating in a tight channel at around 105.30.

EUR/USD climbed to its highest level in three weeks above 1.0810 in the second half of the day on Wednesday. The pair stays in a consolidation phase and trades slightly below 1.0800 in the European morning on Thursday.

GBP/USD gathered bullish momentum and advanced toward 1.2800 on Wednesday. After correcting lower toward the end of the American session, the pair holds steady at around 1.2750 early Thursday.

Gold turned north and rose above $2,360 for the first time in two weeks as the benchmark 10-year US Treasury bond yield fell nearly 2% following the dismal data releases from the US on Wednesday. XAU/USD struggles to preserve its bullish momentum and trades near mid-$2,350s to start the European session.

After reaching its highest level in nearly four decades near 162.00 on Wednesday, USD/JPY started to edge lower and was last seen trading in negative territory below 161.50.