Traders await US nonfarm payrolls and upcoming CPI data to gauge Fed policy moves amid softer dollar sentiment.
The EUR/USD pair stalled near a critical trendline as markets brace for today’s US nonfarm payrolls report and next week’s inflation data. The dollar weakened this week on Middle East de-escalation and hopes for a US-Iran deal, though momentum faded after no announcement materialized.
While the NFP report typically drives volatility, the Fed’s focus on inflation makes next week’s CPI data more pivotal. Policymakers have downplayed labor market risks, citing steady wage growth near pre-pandemic levels. Still, sharp deviations in hourly earnings could spark dollar moves.
The ECB held rates steady at its last meeting, leaving traders to parse upcoming US data for Fed clues. A hot CPI print may revive rate hike bets, while a soft reading could pressure the dollar further.