The euro’s movements and the US dollar’s weakness
- The euro has dipped slightly but is still near a two-month high, largely due to the US dollar’s weakness.
- Fears surrounding a significant downward revision of US non-farm payroll figures are weighing on the dollar.
- In Europe, ongoing political turmoil in France is also impacting the euro’s value.
As of Tuesday morning before the US trading session, EUR/USD has seen a minor decline, hovering around 1.175. This follows a 1% rise over the previous two days. The ongoing political crisis in France is keeping the euro in check while the US dollar is on the defensive as investors brace for a notable downward adjustment in employment figures.
The U.S. Bureau of Labor Statistics is set to release an adjusted benchmark for US employment data, anticipated on March 2025 at 14:00 GMT. There’s a market expectation of a reduction of up to 800,000 jobs, which would suggest a more fragile labor market than previously thought, possibly pushing the Federal Reserve to hasten its easing measures.
This situation puts additional strain on the already weakened US dollar, which fell over 1% against major currencies after last Friday’s employment report. As per CME Group’s FedWatch tool, the futures market anticipates Fed rate cuts next week, with a 50 basis point reduction likely.
Meanwhile, in France, the political situation complicates the euro’s performance further. Prime Minister François Bailloux recently lost a confidence vote, and reports suggest President Emmanuel Macron is contemplating naming a new Prime Minister “within a few days” rather than calling for an immediate election.
Market Movements and Awaited Events
- The US dollar continues to weaken as markets anticipate disappointing news from the revised payment benchmarks. Unless something unexpected occurs, employment data could indicate that the Federal Reserve is lagging, which would lead to more pressure on the dollar.
- In France, the political landscape remains uncertain following Bailloux’s short tenure, creating a significant impasse that impacts market sentiment around the euro.
- The only notable occurrence in the European session may be remarks from the European Central Bank (ECB) Council members, but substantial revelations about monetary policy are unlikely due to the quiet period ahead of their profit decisions on Thursday.
- The ECB’s monetary policy decision is the key highlight this week. While most experts expect rates to remain steady, investors will be closely analyzing comments from President Christine Lagarde for hints at future policy changes.
- This Thursday, US attention will also be on the August Consumer Price Index (CPI). A strong inflation reading could complicate the Fed’s policy decisions, potentially increasing dollar volatility in light of a weaker labor market.
Technical Analysis: EUR/USD Stability
EUR/USD is currently trading above a significant resistance level, aligned with trends from July and August. The technical indicators suggest upward momentum. The 4-hour RSI indicates strength, though I haven’t made any large purchases yet—perhaps I’ll wait for a clearer picture.
Bulls seem keen to approach the 1.1790 mark again, close to the July 24 high. The Fibonacci level at 1.1923 from early August is a common bullish target.
On the downside, previous resistance at around 1.1740 may limit upward movement seen on August 22 and September 1; there’s also a potential reversal support at the July 1 high of about 1.1720. If the price dips below this, the lowest for September 8 around 1.1705 could come into play.
Upcoming Economic Indicators
Non-farm Payroll Benchmark Revision
The U.S. Bureau of Labor Statistics will release a preliminary estimate for the annual benchmark revision of the employment series, which may impact future employment estimates.
Next release: September 9, 2025, 14:00
Frequency: Irregular
Consensus: –
Previous: –
Source: BLS
