U.K. Parliamentary Elections, U.K. Construction PMI, U.S. Bank Holiday

The EUR/USD pair posted moderate gains on Wednesday ending the session 0.40% higher after a broad miss in US economic figures hinted at further signs of a weakening US economy, sparking fresh hopes for an accelerated pace of rate cuts from the Federal Reserve.

European data also came in mixed early on Wednesday, with the Purchasing Managers Index (PMI) ticking up to 50.9 MoM in June compared to the forecast hold at 50.8. The EU-wide Producer Price Index contracted more sharply than expected in May. The US ADP Employment Change dropped to 150K in June, down from the previous month's 157K. Additionally, US Initial Jobless Claims increased for the week ending June 28, rising to 238K compared to the previous week's 233K. Finally, the US ISM Services Purchasing Managers Index (PMI) sharply contracted to 48.8 in June, marking its lowest level since June 2020.

Gold prices rose more than 1% to a near two-week high on Wednesday, driven by increased bets for a September interest rate cut by the Federal Reserve after recent U.S. data suggested that the labour market was softening.

First-time applications for U.S. unemployment benefits increased last week. A measure of U.S. services sector activity slumped to a four-year low in June amid a sharp drop in orders, potentially hinting at a loss of momentum in the economy at the end of the second quarter.

Following the U.S. data, the dollar slipped to a two-week low, making gold more attractive for other currency holders, while the yield on the benchmark U.S. 10-year Treasury note slid.

Oil prices gained on Wednesday after a larger-than-expected decline in U.S. crude stocks, but gains were capped by concerns about rising global inventories in thin trading ahead of the U.S. Independence Day holiday.

The U.S. Energy Information Administration (EIA) reported a 12.2 million draw in the country's crude oil barrels in storage last week, which was larger than analysts' expectations in a Reuters poll for a 680,000-barrel draw.

Potential supply disruptions due to Hurricane Beryl have also kept prices elevated, although concerns eased after the U.S. National Hurricane Centre said the storm was expected to weaken by the time it entered the Gulf of Mexico this week.

The US 500 and US Tech 100 rose on Wednesday to post record high closes, as data pointing to a softening economy raised hopes the Federal Reserve could cut interest rates in September.

The US 30 closed almost unchanged, pressured by selling in healthcare and consumer stocks. The market will stay closed on Thursday for U.S. Independence Day, keeping trading volumes thin throughout the week.

Both the ADP Employment report and weekly jobless claims data pointed to easing labor market conditions ahead of Friday's closely watched non-farm payrolls report. Markets hope signs of weakness in the labor market will encourage the Fed to cut interest rates.

In company news, Tesla jumped more than 6.5%, trading near a six-month high after rising more than 10% on Tuesday following a smaller-than-expected drop in second-quarter vehicle deliveries.