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EUR/USD Holds Near 1.1800 As Disappointing ADP Report Raises Fed Rate Cut Odds
Thursday, 3 July 2025 06:12 WIB | EUR/USD |EUR/USD

The euro (EUR) posted a minimal loss of 0.08% against the US dollar (USD), trading below the 1.1800 mark on Wednesday. A worse-than-expected US jobs report raised speculation that the Federal Reserve (Fed) could cut interest rates amid growing fears of a recession in the world's largest economy. Currently, the EUR/USD pair is trading at 1.1795, almost unchanged.

On Wednesday, Automatic Data Processing (ADP) announced that private payrolls declined in June, marking the first decline in two years. Although the US dollar initially weakened, it recovered slightly, dragging EUR/USD back below the 1.1800 mark as traders prepare for the release of the latest employment figures.

US Nonfarm Payrolls (NFP) are expected to come in at 110K, below the 139K in May. The Unemployment Rate is forecast at 4.3%, up from 4.2%, but well below the 4.4% projected by the Federal Reserve for the end of the year.

A weaker-than-expected US jobs report could increase the chances of further easing by the Fed. Recently, Richmond Fed President Thomas Barkin stated that there is no urgency to change the current policy, noting that a large amount of incoming data is expected ahead of the July meeting.

In the Eurozone, the latest Unemployment Rate report rose from 6.2% to 6.3% in May, beating estimates and in line with the previous reading.

Meanwhile, European Central Bank (ECB) Policymakers made headlines. Mario Centeno said that the central bank remains cautious about the path of interest rates, while Olli Rehn added that they must be mindful of the risk of persistent inflation below the 2% target. Pierre Wunsch said he is not uncomfortable with market interest rate expectations. (alg)

Source: FXstreet

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