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ECB meeting and US jobs data drive EUR/USD toward 1.1627

EUR/USD traded near 1.1627 after August nonfarm payrolls beat forecasts by a wide margin and markets lifted the odds of a September Fed rate hike to about 58%.

Reported · Written up by our desk · Major Pairs

EUR/USD held near 1.1627 on Tuesday as a stronger-than-expected US jobs report supported the dollar and increased expectations for tighter Federal Reserve policy. The US economy added 162,000 nonfarm payrolls in August versus roughly 56,000 forecast, while the unemployment rate stayed at 4.1%, and average hourly earnings rose 3.1% year-on-year.

Markets also revised earlier data upward, with the Bureau of Labor Statistics increasing June and July results by a combined 55,000 jobs, turning July’s previously reported decline into a gain. After the release, money markets raised the probability of a September Fed rate increase to around 58% from about 52% before the data.

Attention then shifted to the European Central Bank meeting on 10 September, where a 25 basis point deposit rate increase is already fully priced in. Reuters polling of 65 economists expects the ECB to raise the deposit rate to 2.50%.

According to Action Forex, the euro’s next move depends less on the decision itself and more on the ECB’s guidance in the press conference. With eurozone inflation accelerating to 3.3% in August, driven largely by energy costs, Action Forex said the question is whether Christine Lagarde confirms further tightening remains on the table, which could influence EUR/USD toward the top of its current range near 1.1655.

Latest closeEUR/USD 1.159 ▼0.1%

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