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- EUR/USD is hovering near 1.1855 after retreating from weekly highs at 1.1928.
- Eurozone economy grew at a steady pace in the last quarter of 2025.
- Concerns about AI's disruption of the labour market keep risk appetite subdued.
The Euro (EUR) keeps trading lower against the US Dollar (USD) for the fourth consecutive day on Friday, hovering below 1.1860 at the time of writing, down from its weekly high of 1.1928. Better-than-expected Eurozone Gross Domestic Product (GDP) data has failed to offset the negative impact of the risk-averse sentiment.
Preliminary data released by Destatis earlier on Friday revealed that the Eurozone economy grew at a steady 0.3% pace in Q4 and 1.4% year-on year, against expectations of a moderate slowdown to 1.3%. Eurozone Employment Change figures, released at the same time, have shown a 0.2%, unchanged from Q3 but above the 0.1% market consensus. Year-on-year, Eurozone jobs rose 0.6%, in line with expectations.
The Euro, however, remains on its back foot amid a dismal market sentiment. Investors’ fears about AI's negative impact on the labour market triggered another decline on Wall Street, after Microsoft AI CEO Mustafa Suleyman told The Financial Times that all white-collar jobs would be replaced in the next 12 to 18 months.
The US Dollar picks up in risk-off markets
The risk-off mood extended through the Asian session, providing some support to the safe-haven US Dollar, and offsetting Thursday's downbeat macroeconomic data. US Initial Jobless Claims fell by 5K but remained at high levels, at 227K, and above the 222K expected. Beyond that, Existing Home Sales fell by 8.4% in January, feeding concerns about the strength of the US economy.
Market movement, however, remains subdued, with traders awaiting the release of January’s US CPI figures for further insight into the Federal Reserve’s (Fed) monetary policy plans. Headline inflation is expected to have eased to 2.5% year-on-year, from 2.7% in December, with the core inflation down to 2.5% from 2.6% in the previous month.
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