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EUR/USD rises as weak US labor data cools September rate hike odds

EUR/USD was last around 1.1554, while the likelihood of a September Fed hike fell to about 56% from 67% a day earlier.

Reported · Written up by our desk · Major Pairs

EUR/USD edged higher on Wednesday, supported by weaker-than-expected US labor market signals and easing concerns around energy-driven inflation. FXStreet said the pair was trading near 1.1554, up almost 0.20% on the day.

The data flow included ADP Employment Change of 44K for July, missing expectations of 70K and down from 98K in June. That followed Tuesday’s softer JOLTS Job Openings print, while the ISM Services PMI rose to 54.1 in July, slightly above June’s 54 but below the 54.5 forecast.

Market pricing also shifted. According to the CME FedWatch Tool cited by FXStreet, traders priced in roughly a 56% chance of a September rate hike, down from 67% the prior day, with additional focus now on Friday’s Nonfarm Payrolls.

Oil prices stayed under pressure on expectations that an interim agreement involving the United States, Iran, and Oman could be announced as early as Wednesday, with the Strait of Hormuz potentially reopening. FXStreet noted that lower oil would reduce inflation risks, though US inflation remains above the Fed’s 2% target, helping limit the US dollar’s downside.

Latest closeEUR/USD 1.153 ▼0.1%

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