EUR/USD struggles to extend its upside move above 1.0430 in Wednesday's North American session. The upside move in the major currency pair appears to be stalling as the US Dollar (USD) strives to gain ground after the release of upbeat United States (US) ADP Employment Change for January. The ADP Research Institute reported that the private sector hired 183K workers in January, higher than estimates of 150K and the prior release of 176K, revised significantly higher from 122K.

Upbeat private employment is expected to boost market expectations that the Federal Reserve (Fed) will keep interest rates in the range of 4.25%-4.50% for a longer period. Last week, Fed Chair Jerome Powell stated that monetary policy adjustments would become appropriate only when officials would see "real progress in inflation or at least some weakness in the labor demand".

Going forward, the next trigger for the US Dollar will be the US Nonfarm Payrolls (NFP) data for January, which will be released on Friday. The official employment data will demonstrate the current status of labor market vividly.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, rebounds slightly after posting a fresh weekly low near 107.40. Earlier in the day, the USD slumped as it lost some risk premium, with investors assuming that the scope of a trade war won't be wider.

Market participants expect the trade war to be mainly between the United States (US) and China as the latter has retaliated against 10% levies by imposing tariffs on various US exports, including farm equipment, some autos, and energy items such as Coal and Liquefied Natural Gas (LNG).

With the rest of the world, investors expect US President Donald Trump will use tariffs as a tool to have a dominant position in negotiating deals with trading partners. President Trump's postponement of 25% tariffs on Canada and Mexico stemmed from expectations that tariffs are more of a political maneuver.

Source : Fxstreet