EUR\/USD slipped to about 1.1905 in early European trading on Tuesday, ending a two-day rise. Trading was cautious ahead of delayed US employment and inflation data after a four-day government shutdown.<\/p>\n
White House economic adviser Kevin Hassett said US job growth could stall in coming months. He linked this to slower labour force growth and higher productivity.<\/p>\n
The US Nonfarm Payrolls report is due on Wednesday and is forecast to add 70,000 jobs in January. The Unemployment Rate is expected to stay at 4.4%.<\/p>\n
Weaker-than-expected US figures could weigh on the US dollar and support EUR\/USD. Stronger labour data could lift the dollar against the euro.<\/p>\n
Last week, the ECB kept its benchmark interest rate at 2.0% for the fifth meeting in a row. The decision matched expectations.<\/p>\n
ECB President Christine Lagarde said policy would remain data-dependent and decided on a meeting-by-meeting basis. She said the bank would not precommit to a specific rate path.<\/p>\n
In a Reuters January poll, around 85% of economists said the ECB would keep rates steady through the rest of 2026. This survey result points to expectations for a prolonged hold.<\/p>\n
We see the EUR\/USD pair is trading near 1.0750, showing some weakness as markets brace for this week\u2019s US inflation data. This feels similar to past periods of uncertainty we saw in 2025 before major data releases. The key focus for us now is the Consumer Price Index (CPI) report, as it will heavily influence the Federal Reserve’s next move.<\/p>\n
The latest US inflation reading for January 2026 came in at a stubborn 2.8%, still well above the Fed’s 2% target. This persistent inflation, combined with a surprisingly strong jobs report last week that added 215,000 jobs, suggests the Fed has no reason to consider cutting interest rates soon. This strength in the US economy continues to support the dollar.<\/p>\n
On the other side of the Atlantic, the European Central Bank (ECB) is telling us it will remain data-dependent and is not committing to a rate path. Eurozone inflation has cooled more quickly than in the US, recently hitting 2.2%, giving the ECB room to hold rates steady as they promised. This policy divergence between a firm Fed and a patient ECB is putting downward pressure on the EUR\/USD.<\/p>\n
Looking back at the market volatility in 2025, we learned that central bank policy differences are the main driver for this currency pair. The interest rate differential between the US and the Eurozone has widened to over 1.5 percentage points, making it costly to bet against the dollar. We expect this trend to continue for the foreseeable future.<\/p>\n
For traders, this points toward a stronger dollar in the coming weeks. We believe options strategies that favor a decline in EUR\/USD, such as buying puts, could be effective. Given the upcoming inflation report, we also anticipate a rise in short-term volatility.<\/p>\n
Therefore, holding short EUR\/USD positions not only aligns with the economic data but also allows traders to benefit from the positive carry trade. This involves earning the interest rate difference between the two currencies. We see the path of least resistance for the pair as being downward, likely testing the 1.0600 level.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD slips near 1.1905 as markets await US jobs data; ECB holds rates, stays data-dependent.<\/p>\n","protected":false},"author":62,"featured_media":16967,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41451","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/41451","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=41451"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/41451\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16967"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=41451"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=41451"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=41451"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}