Key Moments
- EUR/USD trades around 1.1620 in early Asian dealings as investors await key U.S. jobs figures for May.
- Markets are looking to the U.S. Nonfarm Payrolls report, with forecasts calling for 85,000 new jobs and a 4.3% Unemployment Rate.
- Expectations for further Federal Reserve and European Central Bank policy moves are shaping sentiment toward both the U.S. Dollar and the Euro.
EUR/USD Holds in Narrow Range Ahead of U.S. Nonfarm Payrolls
The EUR/USD pair is trading largely unchanged near 1.1620 in early Asian hours on Friday, as market participants avoid taking large positions ahead of a closely watched U.S. labor market release. The U.S. jobs report for May is expected to be the main catalyst for foreign exchange markets later in the day.
Earlier in the week, stronger-than-anticipated U.S. May ADP private payrolls and JOLTS job openings data pointed to ongoing strength in the U.S. labor market. Investors are now looking to the official Nonfarm Payroll (NFP) report for additional confirmation and direction.
Consensus projections point to an increase of 85,000 jobs in May, with the Unemployment Rate seen holding at 4.3% over the same period.
Fed Expectations and Dollar Outlook
Evidence of further improvement in U.S. employment conditions could reinforce expectations that the Federal Reserve will maintain higher interest rates for an extended period, which would likely underpin the U.S. Dollar (USD) against the Euro (EUR). Market pricing currently reflects nearly a 42% probability of a Fed rate hike in December, according to the CME FedWatch Tool.
ECB Policy Stance Supports the Euro
On the European side, a hawkish European Central Bank (ECB) outlook is helping to cushion downside pressure on the common currency. A Reuters survey of economists indicated that the ECB is expected to lift its deposit rate to 2.25% at its upcoming June policy meeting, with another increase anticipated in September.
| Key Policy Expectations | Detail |
|---|---|
| Fed rate move probability (December) | Nearly 42% chance of a hike (CME FedWatch Tool) |
| Expected ECB deposit rate (June meeting) | 2.25% |
| Potential ECB follow-up move | Another increase likely in September (Reuters poll) |





