Image Source: Pixabay
The EUR/USD pair gains traction to near 1.1915 during the early European session on Wednesday, bolstered by a weaker US Dollar (USD). Markets might turn cautious later in the day ahead of the delayed US employment report for January, which will offer clues on the path of Federal Reserve (Fed) policy.
The weaker-than-expected US Retail Sales data dragged the Greenback lower and acted as a tailwind for the major pair. US Retail Sales remained unchanged at $735 billion in December, according to the US Census Bureau on Tuesday. This reading followed the 0.6% rise seen in November and came in below the market consensus for an increase of 0.4%. On a yearly basis, Retail Sales rose 2.4% in December, versus 3.3% prior.
Fed Bank of Cleveland President Beth Hammack said that interest rates could be on an extended hold while officials evaluate incoming economic data. Meanwhile, Dallas Fed President Lorie Logan noted that she’s hopeful inflation will continue to come down, though it would take “material” weakness in the labor market for her to support more rate cuts.
Markets expected US Nonfarm Payrolls (NFP) to increase by 70,000 in January. The Unemployment Rate is forecast to remain steady at 4.4%. Any signals of recovery in the US job market might boost the USD against the shared currency in the near term.
On the Euro’s front, the European Central Bank (ECB) decided to hold its benchmark interest rate steady at 2.0% for the fifth meeting in a row last week, as widely expected. During the press conference, ECB President Christine Lagarde said that the central bank would maintain its data-dependent and “meeting-by-meeting approach” and would not be “precommitting to a particular rate path.” Around 85% of economists surveyed by Reuters in their January poll said the ECB would keep the interest rates steady over the rest of 2026.
More By This Author:
USD/CAD Edges Lower To Near 1.3550 As Crude Oil Prices Rise, US NFP Data In FocusEUR/USD Weakens To Near 1.1900 As Traders Eye US Data
USD/CAD Holds Below 1.3700 Amid Weak US Labor Data, Higher Crude Oil Prices
Comments
Log in or sign up to join the conversation.