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• EUR/USD depreciates as the US Dollar continues to gain ground on Friday.
• Higher US Treasury yields contribute to underpin the Greenback.
• ECB President Lagarde provided no hints about the stance for the next meeting, stating that September was "wide open."

EUR/USD extends its losses for the second consecutive day, trading around 1.0890 during the Asian session on Friday. The decline in the EUR/USD pair can be attributed to the strengthening of the US Dollar (USD) amid increased risk aversion.

The greenback is bolstered by rising US Treasury yields, but its upside potential may be constrained by soft labor data, which enhances market expectations for a Federal Reserve (Fed) rate cut in September.

US Initial Jobless Claims increased more than expected, data showed on Thursday, adding 243K new unemployment benefits seekers for the week ended July 12 compared to the expected 230K, and rising above the previous week’s revised 223K.

According to CME Group’s FedWatch Tool, markets now indicate a 93.5% probability of a 25-basis point rate cut at the September Fed meeting, up from 85.1% a week earlier.

On the EUR front, The European Central Bank (ECB) decided to maintain its main refinancing rate at 4.25%, as expected, at its July Monetary Policy Meeting on Thursday. The ECB's deposit facility rate also remains unchanged at 3.75%.

At the press conference following the interest rate decision, ECB President Christine Lagarde stated, "The question of September and what we do in September is wide open." Lagarde also noted that the monetary policy decision had been unanimous and emphasized the central bank's commitment to relying on a range of data rather than any single data point, according to Reuters.

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