Eurozone GDP contraction in Q1 fails to dent EUR as traders focus on US jobs report and Fed policy outlook.
The Euro climbed to just below 1.1650 against the US Dollar on Friday, shrugging off weaker-than-expected Eurozone GDP data. Markets are paring USD long positions ahead of the US Nonfarm Payrolls report, which could influence Federal Reserve policy decisions.
Eurostat revised Eurozone Q1 GDP growth to a 0.2% contraction, the first decline in over three years, down from an initial 0.1% growth estimate. Year-on-year growth slowed to 0.3%, below the 1.2% recorded in Q4. Employment growth matched consensus at 0.1%, easing from the previous quarter’s 0.2%.
Investors expect US payrolls to rise by 85K in May, below April’s 115K but well above last year’s 10K average. A strong print could reinforce expectations for further Fed tightening, supporting the USD recovery narrative.