EUR/USD slips to 1.1640 as US labor woes boost Dollar ahead of NFPs
The EUR/USD retreats after reaching a weekly high of 1.1736 on September 1, as economic data from the US drives the Dollar higher against the shared currency, which witnessed a soft Retail Sales report. The pair trades at 1.1640, down 0.12%.
Euro retreats on weak EU Retail Sales, while US jobs data and looming Fed cut dominate sentiment
A tranche of US economic data showed that the labor market is deteriorating. The August Challenger Job cuts showed that companies slashed close to 86K Americans from the labor force, while the ADP National Employment Change report in August, fell short of estimates. The number of people filling up for unemployment benefits rose, amid an environment in which jobs data has taken the center stage.
Market participants are near to fully price in a 25-basis points rate cut by the Fed. Nevertheless, the Nonfarm Payrolls report looming, suggests that EUR/USD traders should wait for the release, before opening fresh positions.
Other data showed that the Trade Balance witnessed an increase in the deficit in July as companies rushed to increase supplies and inventory ahead of tariffs becoming effective. At the same time, business activity in the services sector improved, according to the Institute for Supply Management (ISM).
Given the fundamental backdrop in the US, the scenario suggests that the economy is slowing down, but it remains solid. Nevertheless, the labor market seems to be taking its toll, justifying Fed Chair Jerome Powell pivot in Jackson Hole, where he opened the door to adjust interest rates.
Across the pond, softer than expected Retail Sales report, exerted pressure on the Euro. Despite this, further EUR/USD upside is seen, after Isabel Schnabel, member of the European Central Bank (ECB) was hawkish, calling for steady rates as the economy remains steady.
Traders’ eyes shift to Nonfarm Payroll figures on Friday, with economists expecting the economy to add 75K jobs in August.
Source: Fxstreet
