The Euro strengthens in the North American session, recording an increase of 0.30% as the Greenback declines following disappointing US jobs data and a shift in business sentiment towards a more pessimistic economic outlook. The EUR/USD is currently trading at 1.1590, having rebounded from daily lows of 1.1547.
The EUR/USD pair experiences an upward movement as the Dollar shows signs of weakness following disappointing economic data from the US, recovering from the lows observed in the earlier session. The ADP report indicates a continued cooling in the labor market, as the NFIB optimism index reaches its lowest point of the year. The Senate has approved a stopgap funding bill; traders are now anticipating the House vote while Federal Reserve officials provide conflicting signals.
> Euro appreciates as soft The ADP report and prevailing business pessimism strengthen expectations for a rate cut by the Fed in December : The US economic docket is limited at present; however, Automatic Data Processing has published the weekly ADP Employment Change, which supports the notion that the labor market is deteriorating. The NFIB Small Business Optimism Index has declined to its lowest point of the year. On Monday evening, the US Senate approved the funding stopgap bill with a vote of 60-40. The House of Representatives is now in focus, as House Speaker Mike Johnson anticipates a swift passage of the funding. Currently, the absence of economic data has traders relying on Fed speakers, who were not present on Tuesday but made headlines on Monday. Fed Governor Stephen Moran maintained a dovish stance, indicating a potential 50-basis point rate cut at the December meeting. In contrast, St. Louis Fed’s Alberto Musalem disclosed that inflation is nearer to 3% rather than 2%, indicating that the labor market has cooled in an orderly fashion and that monetary policy is approaching a neutral stance rather than being modestly restrictive. In Europe, the German ZEW survey for November indicated that German investors exhibit a pessimistic stance regarding the economic outlook, despite an improvement in current conditions that fell short of estimates. The index across the entire bloc surpassed expectations.
Latest FX Rate Trends : EUR/USD poised to continue its upward trajectory due to differences in monetary policy
- The US Dollar Index, which monitors the performance of the American currency against six others, has declined on worries regarding the fragility of the US labor market, currently down 0.15% at 99.47.
- The NFIB Small Business Optimism Index decreased to 98.2 in October, yet it continues to exceed the 52-year average of 98. Meanwhile, the Uncertainty Index decreased by 12 points from September to 88 — marking its lowest level this year — indicating enhanced clarity among business owners despite ongoing economic challenges.
- The anticipated reopening of the US government fuels speculation regarding the timing of the Bureau of Labor Statistics release of the September Nonfarm Payrolls report. Goldman Sachs anticipates that the NFP report will be released approximately on November 18 or 19.
- The divergence in monetary policy is likely to bolster the Euro, as the European Central Bank is expected to maintain its current interest rates until 2027. On the other hand, the Fed is anticipated to persist with its easing cycle, as traders are factoring in 125 bps of cuts by the conclusion of 2026.