EUR/USD moves in a narrow range near 1.1600 as focus shifts to US Non-Farm Payrolls

EUR/USD Holds Steady Ahead of Key US Jobs Data

EUR/USD is trading within a narrow band near the 1.1600 level during Friday’s European session. The currency pair is consolidating as market participants await the release of the United States Nonfarm Payrolls (NFP) report for February, scheduled for 13:30 GMT.

At the time of writing, the US Dollar Index (DXY)—which measures the dollar’s strength against a basket of six major currencies—is hovering around 99.00, maintaining proximity to its recent three-month peak of 99.68 reached earlier in the week.

The upcoming NFP figures are expected to play a crucial role in shaping the Federal Reserve’s monetary policy direction, as policymakers remain attentive to ongoing risks in the labor market.

Analysts predict that US employers added 59,000 new jobs in February, a notable decrease from the 130,000 positions created in January. The Unemployment Rate is projected to remain unchanged at 4.3%. Additionally, Average Hourly Earnings—a key indicator of wage inflation—are anticipated to hold steady at 3.7% year-over-year.

If labor demand and wage growth exceed expectations, traders may further scale back expectations for a dovish Fed stance. Earlier this week, speculation about a potential rate cut by the Fed in July diminished after Wednesday’s ADP Employment Change report revealed stronger-than-anticipated job gains for February.

Data from the CME FedWatch tool shows that the probability of the Federal Reserve maintaining current interest rates at the July meeting has risen to 47.4%, up from 33.4% a week ago.

ECB Maintains Cautious Stance Amid Geopolitical Tensions

Meanwhile, in the Eurozone, the European Central Bank (ECB) is widely expected to keep interest rates unchanged for an extended period, despite ongoing conflict in the Middle East. During a Q&A session on Thursday, ECB President Christine Lagarde emphasized that monetary policy is not predetermined and that the central bank is closely observing the effects of the regional turmoil.