EUR/USD remains under pressure following a mixed US employment report

EUR/USD Slips as US Labor Data Sends Mixed Signals

The Euro (EUR) continued to weaken against the US Dollar (USD) on Friday, as investors digested a combination of positive and negative signals from the latest US employment figures. At the current moment, the EUR/USD pair is trading near 1.1638, marking its seventh consecutive day of declines while the US Dollar maintains its strength across major currencies.

The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) increased by 50,000 in December, falling short of the anticipated 60,000 rise and slowing from November’s 64,000 gain. Meanwhile, the Unemployment Rate dropped to 4.4%, better than the expected 4.5% and down from the previous 4.6%.

Average Hourly Earnings climbed by 0.3% month-over-month in December, aligning with forecasts and surpassing November’s 0.1% uptick. Year-over-year, wage growth accelerated to 3.8%, exceeding both the prior month’s 3.6% and market expectations.

Overall, the employment report painted a mixed picture: while job creation lagged, the decline in unemployment and stronger wage growth pointed to ongoing resilience in the US labor market.

From a monetary policy perspective, the slower pace of hiring—despite otherwise robust labor conditions—has strengthened the view that the Federal Reserve will likely keep interest rates steady at its January 27-28 meeting, though a gradual shift towards easing later in the year remains possible.

Looking forward, market participants will focus on the preliminary January Consumer Sentiment survey from the University of Michigan, as well as upcoming remarks from Richmond Fed President Thomas Barkin and Minneapolis Fed President Neel Kashkari, for further clues on the economic and policy outlook.