Forex
Home›Forex›Major Pairs›Euro rallies after weak US jobs data shifts Fed hike b…
Euro rallies after weak US jobs data shifts Fed hike bets
EUR/USD jumped 0.43% to around 1.1570 as July nonfarm payrolls fell 23K and prior months were revised down, cutting the odds of a September rate hike to 44% from 55%.
The euro strengthened sharply against the US dollar after a much weaker-than-expected US employment report shifted market expectations for Federal Reserve policy. According to FXStreet, EUR/USD rose 0.43% on the day and traded around 1.1570, with the dollar coming under heavy selling pressure after the data. US Nonfarm Payrolls declined by 23K in July versus expectations for an increase of 80K jobs, and previous months were revised lower, according to the Bureau of Labor Statistics. FXStreet said June payroll growth was revised down from 57K to 20K, and May was revised from 129K to 63K, for a combined downward adjustment of 103K jobs, while the unemployment rate edged down to 4.1% from 4.2% and average hourly earnings growth slowed to 3.2% from a downwardly revised 3.4%. The weaker labor backdrop reduced bets that the Fed will tighten further. FXStreet cited the CME FedWatch Tool showing the probability of a 25-basis-point hike at the September meeting fell to 44%, down from 55% the prior day and 67% a week earlier. In Europe, FXStreet noted that Germany’s industrial production rose 0.2% in June, beating expectations of 0.1%, but trade surplus narrowed to €15.4B. It also said the ECB remains cautious after leaving rates unchanged, while markets now look ahead to how the Fed responds to the deterioration in US labor data.
Latest closeEUR/USD 1.152 ▼0.3%