- EUR/USD ticks up as traders adjust positions ahead of key Eurozone and US economic data releases.
- The preliminary Eurozone PMI data could impact the Euro before the highly anticipated US Nonfarm Payrolls report.
- Any notable deviation from the anticipated figures could trigger increased volatility in the EUR/USD pair.
EUR/USD Rebounds Above 1.1300 in Asian Session
The EUR/USD pair found renewed demand during the Asian trading session on Friday, advancing past the psychological 1.1300 level. This recovery halts a three-day losing streak that drove the pair to a more than two-week low near the 1.1265 mark on Thursday. The rebound appears to stem from repositioning by traders ahead of key economic indicators from both the Eurozone and the United States.
Focus on Eurozone Inflation Data
Recent statements from European Central Bank (ECB) policymakers have highlighted concerns about weakening inflation across the Eurozone. As a result, market participants are closely watching the upcoming flash Consumer Price Index (CPI) release. A weaker-than-expected CPI print could strengthen expectations for a 25 basis-point rate cut by the ECB in July. Such an outcome would likely weigh on the euro and could trigger a renewed decline in EUR/USD from last month’s peak near 1.1575—the highest level since November 2021.
US Nonfarm Payrolls to Shape Dollar Sentiment
Attention also turns to the US Nonfarm Payrolls (NFP) report, which is projected to show a slowdown in job creation, with an estimated gain of 130K positions in April compared to 228K in March. However, the unemployment rate is expected to remain unchanged at 4.2%. The data could significantly influence expectations for the Federal Reserve’s next policy steps, and thus impact the US Dollar’s trajectory.
Fed Rate Cut Expectations Limit USD Gains
Despite a recent upward push, the US Dollar has been unable to sustain momentum. Expectations for more aggressive rate cuts by the Federal Reserve—four quarter-point reductions by year-end—have increased after data earlier this week revealed the first US economic contraction since 2022. These expectations are capping bullish sentiment toward the USD and are offering some support to the EUR/USD pair in the short term.
