The EUR/USD exchange rate dipped to approximately 1.1905, breaking a two-day uptrend during early European trading on Tuesday. Traders are likely exercising caution as they await important U.S. economic data related to jobs and inflation, which have been briefly delayed due to the recent four-day government shutdown.
Kevin Hassett, an economic advisor at the White House, mentioned on Monday that job growth in the U.S. might hit a snag in the upcoming months, possibly influenced by slower labor force growth and enhancements in productivity.
The forthcoming Nonfarm Payrolls (NFP) report, set to be released on Wednesday, forecasts a payroll increase of 70,000 for January, with the unemployment rate expected to remain steady at 4.4%. If the actual figures fall short of expectations, this could put downward pressure on the U.S. dollar, while a solid labor market performance might uplift the dollar against the euro.
Across the Atlantic, the European Central Bank (ECB) has held its interest rates steady at 2.0% for the fifth successive meeting, a move that had been anticipated. In a press conference, ECB President Christine Lagarde noted that the central bank would adopt a “meeting-by-meeting approach” based on data, without committing to any specific interest rate trajectory in advance.
A significant majority—about 85%—of economists surveyed in January by Reuters predicted that the ECB would maintain its current interest rates throughout 2026.
