The EUR/USD surges more than 1% on Friday as the Greenback gets battered on a worse-than-expected jobs report in the United States (US), which triggered investors' reaction to price in two interest rate cuts by the Federal Reserve (Fed). Data across the pond was shrugged off by traders, which sent the pair from around lows of 1.1391 toward 1.1597.

Wall Street extended its losses amidst fears of an economic slowdown in the US. July Nonfarm Payroll (NFP) figures were expected to be weaker compared to June's, but the downward revisions of the previous two months, alongside last month's print, drove the EUR/USD higher.

Alongside this, the Institute for Supply Management (ISM) revealed that manufacturing activity contracted. Meanwhile, the University of Michigan (UoM) Consumer Sentiment in June deteriorated, ending a bad day of economic reports for the US economy.

Following the NFP, traders immediately rushed to price in interest cuts by the Fed. Before the announcement, investors expected 34 bps of easing. At the time of writing, the CBOT December 2025 fed funds rate contract shows nearly 62 bps of easing towards the year's end.

The odds for a 25 bps rate cut by the Fed at the September meeting are at 76%, according to Prime Market Terminal data.

Across the pond, the European Union's July Harmonized Index of Consumer Prices (HICP) came in unchanged at 2.4% YoY, defying expectations for a slight dip to 2.3%. Core HICP remained steady at 2.0%, slightly above the 1.9% forecast, suggesting that underlying inflationary pressures remain firm.

Source: Fxstreet