EUR/USD Steady As US Dollar Strengthens Ahead Of NFP
The EUR/USD pair weakened to around 1.1290 during the early Asian session on Friday (2/5). The US dollar (USD) moved higher against the Euro (EUR) amid optimism about a de-escalation in the global trade conflict. All eyes will be on the US April Nonfarm Payrolls (NFP) report, due on Friday.
A social media account affiliated with Chinese state media said on Thursday that the United States (US) has contacted China to start negotiations on US President Donald Trump’s 145% tariffs. US officials, including Treasury Secretary Scott Bessent and White House economic adviser Kevin Hassett, also expressed hope for progress in easing trade tensions. This, in turn, provided some support to the greenback and created a headwind for the major currency pair.
US data released on Thursday was mixed. Weekly US Initial Jobless Claims for the week ending April 26 rose by 241,000, compared to 223,000 the previous week (revised from 222,000), according to the US Department of Labor. This reading was above market consensus of 224,000. Meanwhile, the ISM Manufacturing Purchasing Managers’ Index (PMI) fell to 48.7 in April from 49.0 in March, beating market expectations of 48.
On the euro side, traders are largely expecting a 25 basis point (bps) interest rate cut by the European Central Bank (ECB) at its June policy meeting. ECB officials have been expecting a further slowdown in inflation and economic growth in response to tariffs imposed by the US on its trading partners. Rising bets of further ECB rate cuts could weigh on the common currency in the near term.
The US NFP report will be in the spotlight on Friday. The US is expected to add 130K new jobs in April, while the Unemployment Rate is expected to remain unchanged at 4.2% from March. A weaker-than-expected reading could weaken the USD against the EUR.
Source: FXStreet
