The EUR/USD pair pulls back beneath 1.1900 on Wednesday as the Greenback rebounds following a robust jobs report from the United States, highlighting the economy’s resilience. Currently, EUR/USD is positioned at 1.1885, reflecting a decrease of 0.07%.
EUR/USD declines as the 130K payroll increase and 4.3% unemployment rate underscore the robustness of the US labor market. Markets are reducing their expectations for a rate cut in March, instead pushing the anticipated easing timeline toward the end of the year. Hawkish comments from Jeffrey Schmid reinforce the Fed’s position, even in light of previous job revisions.
The Euro experiences a slight decline following robust US employment figures and assertive comments from the Federal Reserve, which have tempered expectations for interest rate cuts. Recently, the US Bureau of Labor Statistics indicated that the economy saw an increase of 130K workers in the workforce, as per the data from January’s Nonfarm Payrolls. The report revealed that private companies were responsible for the majority of the hiring, contributing 172K positions, while the US government decreased its workforce by 42K. After the data was released, EUR/USD experienced a decline, reaching a daily low of 1.1833. This movement occurred as the report indicated a decrease in the Unemployment Rate to 4.3%, which is below the Federal Reserve’s projected estimate of 4.5% for 2026. The BLS has published its annual revision of Nonfarm employment data, indicating that earlier estimates of job growth were considerably exaggerated. The March 2025 figure was reduced by 898K jobs, indicating a notable change in employment trends. Job growth for 2025 is now projected at 181K, a significant decrease from the earlier estimate of 584K, suggesting a slowdown in hiring compared to expectations.
As a result, investors significantly reduced their expectations for a March rate cut, with the likelihood of maintaining the current rate hovering around 95%, based on data from Prime Market Terminal. According to data, money markets had factored in nearly 51 basis points of easing by the end of the year. Hawkish remarks from Kansas City Fed President Jeffrey Schmid also impacted the EUR/USD pair. He stated, “With inflation still running hot, it appears that demand is outpacing supply across much of the economy.” Schmid noted that “Further rate cuts risk allowing high inflation to persist even longer.” In Europe, the docket was devoid of significant updates; however, earlier remarks from European Central Bank officials indicated that inflation remains under control and have overlooked the recent strength of the Euro, in line with President Christine Lagarde’s stance. During the press conference regarding the ECB’s monetary policy decision, Lagarde stated that they have already taken the Euro’s strength into consideration.