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Euro firms versus dollar as softer US jobs shift Fed expectations

EUR/USD briefly hit 1.1581, its highest level in nearly two months, after nonfarm payrolls missed expectations and markets pared September tightening assumptions.

Reported · Written up by our desk · Major Pairs

Danske Research Team, via FXStreet, said a weaker US jobs report prompted a repricing of Federal Reserve tightening expectations, helping the US dollar lose ground and lifting EUR/USD briefly to 1.1581, the highest level in nearly two months.

The July jobs data showed nonfarm payrolls at -23k versus expectations of +80k, with May and June revised lower by a cumulative -103k. The unemployment rate fell to 4.1% and the labor force participation rate dropped to 61.4%, the weakest since February 2021.

Danske Research also cautioned that the report may not be unambiguously dovish, noting the Fed faces a trade-off between below-expectations job growth and a still-declining unemployment rate. The team pointed to initial commentary from Fed official Barkin acknowledging labor-market weakness while citing resilient corporate earnings.

Looking ahead for EUR/USD, FXStreet highlighted the upcoming US inflation data and euro area GDP releases as key catalysts. It also noted that the Sentix Investor Confidence indicator is due, with the July reading marking the third straight monthly improvement.

Latest closeEUR/USD 1.152 ▼0.3%

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