Traders reassess rate hike timelines after weak US jobs data and softer Eurozone inflation figures.
EUR/USD trades around 1.1438, recovering from a two-week losing streak as the USD stabilizes post-jobs report. The pair hit an intraday high of 1.1462 but failed to extend gains amid subdued US market activity due to the Independence Day holiday.
The US Dollar Index (DXY) sits at 100.76 after dropping to a two-week low of 100.56. Weaker-than-expected US jobs data delayed Fed rate hike expectations, while softer Eurozone inflation raised doubts about further ECB tightening this year. Both central banks face inflation above 2% targets.
Markets still price in a potential Fed rate hike later this year, with ECB action contingent on second-round inflation effects. Fed Chair Warsh and ECB President Lagarde adopted cautious tones at the ECB Forum in Sintra.