EUR/USD tops 1.1750 as soft US jobs cement Fed cut bets
The EUR/USD pair post back-to-back bullish days, rising over 0.37% on Monday as traders grow confident that monetary policy in the United States (US) will resume its easing cycle after the Federal Reserve (Fed) Chair Jerome Powell acknowledged the weakness of the labor market. A soft jobs report pushed the pair past the 1.1700 figure, though it remains shy of the yearly peak of 1.1829.
Euro gains as Dollar weakens on NFP miss, French political turmoil adds uncertainty to outlook
Last Friday’s Nonfarm Payrolls report reassured investors that the labor market in the largest economy in the world is undergoing an economic slowdown, yet to be reflected in Gross Domestic Product (GDP) data. In August, the economy added 22K jobs, below forecasts of 75K, while the Unemployment Rate ticked up from 4.2% to 4.3%.
The data cemented the case for the Federal Reserve’s first rate cut in 2025. Market players had fully priced in a 0.25% cut, but odds for a 0.50% rate reduction stand at a slim 12% chance.
During the last couple of trading days, the US Dollar retreated almost 0.80% as traders await the Fed’s September 16-17 meeting. This has been a tailwind for Euro bulls, who also need to address the political turmoil in France.
Recently, the Prime Minister François Bayrou was ousted after losing the confidence vote. French President Macron is expected to name a new PM in the upcoming days, with speculations mounting that it would be named after the September 10 strikes.
Ahead in the week, the docket on both sides of the Atlantic could ignite some volatility. In the US, inflation figures on the producer and consumer side could spark some action in the EUR/USD pair. On Thursday, the European Central Bank (ECB) is expected to keep rates in check.
Source: Fxstreet
