EUR/USD Strengthens Above 1.1900 Ahead of US Nonfarm Payrolls
The EUR/USD pair strengthened slightly and held above 1.1900 in early European trading on Wednesday, as the US dollar remained under pressure ahead of the delayed release of January's Nonfarm Payrolls (NFP). In recent trading, EUR/USD hovered around 1.192, with a daily gain of approximately +0.2%.
The main sentiment came from weak US consumer spending data. US retail sales in December were recorded at 0.0% and missed market expectations, signaling that consumer spending—a major driver of the US economy—was beginning to lose momentum at the end of the year.
This data reinforced expectations that the Federal Reserve has room to be more accommodative going forward. However, the market is likely to remain on hold as today's focus is fully on the NFP, which is expected to rise by around 70,000 with a decline rate of 4.4%. A stronger result could potentially boost the dollar and put pressure on the euro in the short term.
From the Fed's perspective, the policy tone remains mixed. Some believe interest rates can be held on hold for longer while awaiting data, and further cuts would require a more pronounced weakening in the labor market—comments that have made the market even more sensitive to today's NFP figures.
Meanwhile, in Europe, a supportive factor for the euro comes from the ECB's stance of remaining data-driven and not rushing to change its interest rate stance. ECB President Christine Lagarde also emphasized that eurozone inflation expectations can stabilize around the 2% target, although the environment remains tense.
In conclusion, the euro is currently gathering steam above 1.1900 as the dollar weakens and markets re-assess the chances of further Fed easing. However, the direction of movement after the European session depends largely on whether the NFP confirms a slowdown in market performance or demonstrates sufficient resilience to encourage a rebound in the dollar. (asd)
Source: Newsmaker.id
