Insights 
VT 
The Euro weakened against the US Dollar following the release of June’s US employment figures. At the time of writing, EUR/USD is at 1.1744, showing a decrease of 0.45%.
The Nonfarm Payrolls report surpassed expectations, indicating the Federal Reserve’s stance on interest rates remains firm. The US Unemployment Rate fell, while Average Hourly Earnings remained stable, reinforcing current monetary policy.
Eurozone Economic Indicators
US President Donald Trump’s fiscal bill passed Congress and awaits signing. Across Europe, HCOB Services PMIs improved, though Germany’s Services PMI remained below 50, indicating contraction.
Market participants remain focused on upcoming economic releases such as Germany’s Factory Orders, ECB speeches and the EU Producer Price Index. The Euro strengthened compared to the Japanese Yen but declined against other major currencies.
June’s US NFP report added 147K jobs, exceeding expectations of 110K and surpassing May’s figures. The Unemployment Rate dropped to 4.1%. Initial Jobless Claims also decreased, reflecting a robust labour market.
The ISM Services PMI increased to 50.8 in June. ECB policymakers are carefully assessing monetary policy scenarios amidst these developments, with the ECB’s role crucial in the Eurozone’s economic landscape.
We’ve just seen the Euro slide notably against the Dollar, as a stronger-than-expected Nonfarm Payrolls report rolls into the picture. EUR/USD dropped to 1.1744, marking a measured response of minus 0.45%. This wasn’t a minor fluctuation—it followed firm job creation numbers out of the US that beat consensus by a fair margin. The labour market clearly has more steam in it than anticipated, with 147,000 new roles added in June, comfortably topping the 110K forecast, and even edging out the previous month. Add to that a dip in unemployment to 4.1%, and a stable pace in hourly earnings, and we’re looking at a situation that gives the Fed little reason to pivot from its current position.
In Washington, the latest fiscal proposals have advanced through Congress, awaiting the final signature. While separate from rate policy, that development sets the scene for potential cost pressures ahead, which could feed into broader economic adjustments if consumption or government spending picks up pace from here.
Meanwhile in Europe, the mood is not uniformly positive. Although the broader services sector picked up across member states based on the latest HCOB PMIs, Germany’s services remain in negative territory, with a reading under 50 still implying a contraction. For a region reliant on its largest economy, this underperformance can’t be brushed aside.
Focus on Future Data
Recent gains in the Euro against the Yen should not be taken at face value. Broader comparison against other major currencies shows a weaker currency profile for the Euro, which points to selective strength rather than widespread confidence.
With the ISM Services Index ticking up to 50.8, US service growth feels tepid but not alarming. Taken together with job gains and falling jobless claims, the data push expectations towards higher-for-longer interest rates in the US, even if no near-term hikes are guaranteed. From where we stand, that limits upward potential for European currencies in the short term unless surprises emerge from other major data events.
Now, attention sharpens towards upcoming European data—German factory orders in particular. Any upside here could spark a re-evaluation, but if the orders disappoint, it may reinforce the sense that Europe’s industrial strength continues to stall. Pair that with the EU’s Producer Price Index and speeches from central bank officials, and the coming weeks could provide more colour on what pace, if any, policy adjustments might follow.
Lagarde and her colleagues are not rushing decisions. They’re weighing risk and inflation dynamics against the backdrop of external weakness. That careful posture likely won’t change unless incoming data clearly argue otherwise. As such, volatility could remain compressed until markets feel something gives—either in the form of sharp inflation changes or renewed growth optimism.
Given how the Dollar has firmed up off US economic results, tactical positioning may need to factor in a narrower trading range until the divergence in data between the US and Europe begins to either widen or close decisively. Plenty rides on whether the PMI and factory output figures can stir sentiment, or whether we continue to react mainly to developments across the Atlantic.
