The euro and the pound rose Thursday morning off of hawkish commentary from their central banks, while the dollar softened after ADP employment in June disappointed. Sterling then took a hit from Brexit concerns ahead of U.K. Prime Minister Theresa May’s cabinet meeting in Chequers.

Euro climbs on optimism, tariff cut talk

The EUR/USD pair climbed to 1.172 Thursday morning off of better-than-expected data and comments from German Chancellor Angela Merkel that she is willing to cut E.U. tariff on cars.

German factory orders for May were better than expected, coming out at 4.4% growth year over year compared to 1.7% expected. The euro climbed from 1.165 to 1.169.

The pair was already advancing off of reports that European Central Bank members believe a rate hike in December 2019 is too late. Investors are fully pricing in a 10 basis point hike in December 2019, but the ECB is considering a hike in September or October, according to reports.

EUR/USD reached as high as 1.172 and has since dipped a bit to 1.169.

Sterling slips on Brexit pessimism

The GBP/USD pair erased the gains it made earlier Thursday from positive comments from the Bank of England’s Mark Carney.

Carney said that the positive data coming out of the U.K., like Wednesday’s upbeat services PMI, will require a rate hike.

Cable climbed to 1.327 Thursday morning before plummeting on Brexit woes.

The pair is being dragged down by reports that German Chancellor Angela Merkel has expressed her doubts about the U.K.’s Brexit plan. Merkel and May are meeting Thursday ahead of May’s cabinet meeting at the Chequers country estate. There are also reports that Brexit Secretary David Davis told May the plan was “unworkable.”

GBP/USD fell to 1.320 before inching upward.

ADP employment misses ahead of NFP Friday

The ADP employment change for June missed expectations the day before the highly watched nonfarm payroll numbers come out.

ADP reported that 177,000 jobs were added in June compared to 190,000 estimated and less than the 189,000 in May. Weekly jobless claims also missed expectations.

The poor jobs numbers weighed on the dollar, which was already trading down against the euro and the pound. USD/JPY remained in stable range around 110.6.

Later today, we’ll see the Federal Reserve’s FOMC meeting minutes for June 12-13.