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With geopolitical risks easing and fiscal/tariff noise fading, conventional macro drivers like employment data will likely take centre stage for FX markets.Key Points:Rate Differentials Still Matter:• The Dollar has already been drifting lower despite wide rate differentials, suggesting flows have been shifting.• Recently, the move down in US front-end rates has gained traction again as safe-haven demand for USD wanes.Geopolitical and Political Risks Fading:• Middle East tensions have relaxed rapidly, diminishing the USD’s safe-haven appeal.• Domestic US risks, like the section 899 provision and reciprocal tariffs, look less immediate, reducing fiscal overhang.Macro Focus Shifts to Labour Market:• Goldman sees a weaker NFP print or signs of a softer labour market as a clear next trigger for the Dollar to weaken further, especially against EUR and JPY.• Such a move would reinforce expectations that the Fed will turn more dovish, adding to downside USD pressure.Broader USD Path:• Absent a sharp labour data miss, the base case remains a gradual USD grind lower, supporting EM carry and a stronger CNY, with spillover effects for Asia FX.Conclusion:Goldman Sachs highlights that the June US jobs report could be the spark for the next leg of Dollar weakness, with EUR and JPY likely to benefit the most. 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