Eurusd Closes The Week In Red

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Eurusd Closes The Week In Red

Eur/Usd Closes The Week In Red Post Nfp

EUR/USD declined sharply on the last trading day of the week after the release of the US NFP. The NFP report showed a healthy picture of the US labor market as the numbers were above the forecast.

Meanwhile, the ECB president commented on how the investors shouldn't have high hopes for another rate cut after the June's rate trim.

272k Jobs Added To Us Economy

During May, 272,000 jobs were added to the US economy, a lot higher than the forecast of 185,000. A month earlier, the reading showed 165,000 jobs only, which means the recent print showed a positive development.

US average hourly earnings were also beyond forecasts as wage growth showed a healthy trend. Overall, a growth of 0.4% m/m was seen in this indicator, which was against the forecast of 0.3%.

However, the unemployment rate in the USA has not improved as it has turned higher and touched 4.0%. When we also look at the rising wages and a strong labor market, it appears that the rate cuts from the US Fed will be delayed once again.

According to the FedWatch tool, there is now a 51% chance that there will be no rate cut during the September meeting. Earlier, there was a 70% chance of a September rate cut, but that has changed since the recent NFP print.

While the chances of a Fed rate cut have gone down, something similar is seen on the ECB side as well. The ECB president added that disinflation progress has been choppy, and the central bank will need to see some solid progress before committing to future rate cuts.

In a sense, we can say that the ECB is now not dovish but it also doesn't mean the central bank is hawkish. Once again, the fate of the rate cuts is tied to the upcoming data in the USA and Europe.

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