EUR\/USD fell after a stronger US jobs report lifted the US Dollar. The pair traded near 1.1875 after dropping about 68 pips to an intraday low around 1.1833.<\/p>\n
US Nonfarm Payrolls rose by 130K in January, above forecasts near 70K and higher than December\u2019s revised 48K. The Unemployment Rate dipped to 4.3% from 4.4%.<\/p>\n
The BLS revised March 2025 total nonfarm employment down by 898K. It also cut total 2025 job growth to 181K from 584K, with average monthly growth in 2025 at 15K.<\/p>\n
Average Hourly Earnings increased by 0.4% month-on-month in January, up from 0.1% and above the 0.3% forecast. Annual wage growth held at 3.7% year-on-year, above the 3.6% estimate.<\/p>\n
Interest-rate futures now almost fully price the Fed policy rate to stay in the 3.50%\u20133.75% range at the March and April meetings, per CME FedWatch. The US Dollar Index traded near 96.95 after an intraday low around 96.49.<\/p>\n
The strong January jobs report is a head-scratcher when we look at the huge downward revisions for all of 2025. This tells us the US economy was much weaker last year than we thought, creating a confusing picture for the dollar’s direction. For the next few weeks, we should expect EUR\/USD to be pulled between the strong recent data and the weak underlying trend.<\/p>\n
With US wage growth holding at 3.7% and the most recent CPI data from last month showing core inflation is still stubborn at 3.9%, the Federal Reserve has no immediate pressure to cut rates. The market is now pricing in a hold for both the March and April meetings, which should provide a short-term floor for the US dollar. This makes aggressive bets against the dollar risky in the immediate future.<\/p>\n
On the other side of the pair, the European Central Bank is dealing with a different situation, as January’s flash inflation estimate for the Eurozone cooled to 2.8%. This opens the door for the ECB to potentially cut rates sooner than the Fed, creating a policy divergence that could weigh on the euro. We believe this dynamic will cap any significant upside for the EUR\/USD pair.<\/p>\n
The conflicting economic signals are causing uncertainty, which is pushing up the cost of options. We are seeing 1-month implied volatility for EUR\/USD climb above 7.0%, suggesting the market is bracing for a larger-than-usual price swing. This environment makes buying volatility through strategies like straddles a compelling way to trade, profiting from a breakout in either direction.<\/p>\n
Alternatively, for those who believe the market will remain indecisive, selling volatility could be the better play. Given the strong technical levels, establishing a range-bound strategy like an iron condor on EUR\/USD options might be prudent. This approach would benefit from the pair staying stuck in a choppy pattern while traders digest the major revisions to last year’s data.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD slid as upbeat US payrolls strengthened the dollar, while markets priced steady Fed rates.<\/p>\n","protected":false},"author":62,"featured_media":16961,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41605","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-ca\/wp-json\/wp\/v2\/posts\/41605","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41605"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41605\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16961"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41605"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41605"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41605"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}