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07/08/26
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Euro Holds Near 1.1520 as Traders Await US Jobs Data
The euro was little changed around 1.1520 against the US dollar on Friday, after easing from a three-week high near 1.1560. The pair remains on course for a modest weekly loss as the dollar holds a firmer tone ahead of the US July Nonfarm Payrolls report due later in the day. Even so, traders appear reluctant to take aggressive positions before the employment data provides clearer direction.
In Germany, fresh data offered a mixed picture of the economy. Industrial production rose 0.2% in June, slowing from a 0.7% increase in May but still exceeding the 0.1% gain expected by economists. At the same time, the trade surplus narrowed to EUR 15.4 billion from a revised EUR 19.4 billion in May, falling short of the market forecast of EUR 17.4 billion.
The dollar also drew support from renewed caution over geopolitical risks. Market participants have become less confident that tensions in the Middle East will ease quickly, particularly after reports that Tehran is considering restrictions on Israeli and US vessels in the Strait of Hormuz. Any threat to passage through the waterway would raise concerns over global energy flows and typically favors the dollar as a safe-haven asset.
Additional support for the greenback came from reports suggesting a more hawkish stance among US policymakers, with expectations that rates could be be lifted as soon as September if inflation remains stubbornly high. That prospect has reinforced the market’s focus on incoming labor data, which could shape interest-rate expectations for the remainder of the year.
Attention now turns to the NFP release, which may determine whether the dollar can extend its recent gains. Analysts at TD Securities expect job growth to soften, noting that recent private-sector employment indicators have moderated after a strong start to the year. A weaker reading would likely temper bets on further dollar strength, while a solid report could keep the currency supported into next week.
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