EUR/USD Market Update

EUR/USD held steady around the 1.1750 mark during Wednesday’s Asian trading session. The significant drop from the previous day’s peak seems to have paused for now. Looking at the broader picture, it appears that the conditions are still leaning towards the bullish side, indicating that prices might continue to rise.

On the other hand, the US dollar has found it tough to capitalize on the recovery from the previous day’s weaker-than-expected US non-farm payrolls (NFP) report. This report revealed an addition of 64,000 jobs in November, whereas many anticipated growth of 50,000 in October, along with a drop of 105,000. Moreover, the unemployment rate ticked up to 4.6% from 4.4% last month.

Despite the mixed signals from the job data, expectations remain strong that the Federal Reserve may lower interest rates two more times in the coming year. There’s also growing speculation around who will succeed Fed Chairman Jerome Powell. A recent article from the Wall Street Journal mentioned that President Donald Trump might discuss this with Fed Director Christopher Waller, amid other candidates such as National Economic Council Director Kevin Hassett and former Fed Director Kevin Warsh.

As for the euro, it is gaining traction, encouraged by the consensus that the European Central Bank (ECB) will not be cutting interest rates any further. However, traders seem a bit hesitant, opting to wait for the critical ECB Governing Council meeting scheduled for Thursday. This will be followed by the latest consumer inflation data from the US, which is expected to be influential in determining demand for the dollar and may provide fresh momentum for the EUR/USD pair. For now, traders are likely to keep an eye on the final Eurozone CPI results released on Wednesday.