EUR/USD Continues to Rise Amid US Labor Market Concerns

The EUR/USD pair held its ground near 1.1540 during late Asian trading on Friday, building on gains from Thursday. Other major currency pairs are also showing resilience as the US dollar experiences selling pressure, likely fueled by concerns regarding the state of the labor market in the United States.

As of this writing, the U.S. Dollar Index (DXY), which measures the dollar’s strength against six main currencies, was slightly up at around 99.80, having previously found support near 99.60.

Data released Thursday in the U.S. Challenger Report indicated that companies laid off 153,074 employees in October. This figure marked a staggering 183% increase compared to September and represented a 175% rise year-over-year. The report attributed these job cuts largely to the growing adoption of artificial intelligence (AI) and ongoing cost-cutting measures by businesses.

A decrease in Job demand indicators has resulted in some hesitance regarding expectations that the Federal Reserve will maintain interest rates at its upcoming final meeting of the year in December.

According to the CME FedWatch tool, the likelihood of the Fed keeping interest rates within the 3.50-3.75% range at that meeting has dropped to 33%, down from 38% reported on Wednesday.

In contrast, the euro has been relatively weak against other currencies, particularly after comments from multiple European Central Bank (ECB) officials suggested no immediate need for changes in monetary policy.

ECB Deputy President Luis Deguindos expressed satisfaction with the “current level of interest rates” during a webinar on Thursday, conveying optimism regarding services inflation and growth.