Traders await Friday’s US Nonfarm Payrolls report, which may sway Fed rate expectations and the dollar’s near-term direction.
The EUR/USD pair remains stable around 1.1505 in early European trading as investors adopt a cautious stance before key US employment data. The July Nonfarm Payrolls report, due Friday, is expected to show an 83,000 increase in jobs, with unemployment rising to 4.3%.
Eurozone inflation edged higher in July, with headline inflation at 2.9% YoY and core inflation accelerating to 2.5% YoY, exceeding forecasts. Markets have priced in multiple ECB rate hikes by April, while Fed rate hike odds for September stand at 64.7%, down from 77% pre-July meeting.
Strategists highlight the Fed’s policy path as the primary driver for EUR/USD movements into September, with stronger US data potentially boosting the dollar.