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EUR/USD flatlines after Friday's surge as Fed dovish bets build, Eurozone sentiment sours
Tuesday, 5 August 2025 06:08 WIB | EUR/USD |EUROPE

The EUR/USD stagnates during Monday's session, virtually unchanged, after Friday's rally of over 1.52% following a worse-than-expected Nonfarm Payrolls report, which triggered a ramp-up of expectations for a Federal Reserve rate cut at the September meeting. The pair trades near Friday's closing price.

The Euro failed to rally, even though some developments pressured the US Dollar. The latest employment report witnessed a revision of the May and June figures, which were sharply revised downward , triggering the firing of the US Bureau of Labor Statistics (BLS) head.

That data, along with a weak ISM Manufacturing PMI reading, triggered a reaction by investors who seem confident that the Fed might ease policy at least by 59 basis points (bps) to support the economy.

Today's data revealed that Factory Orders in June plummeted as expected, ahead of a light calendar that will feature the announcement of the ISM Services PMI, Jobless Claims, Consumer Sentiment data, and Fed speakers.

Across the pond, the Eurozone Sentix Investor Confidence Index tumbled in August to -3.7, following July's 4.5, according to the latest survey. The Current Situation sub-component declined in August compared to July. The survey noted that "The tariff agreement is proving to be a real mood killer."

EU to suspend trade countermeasures on the US for six months as part of the US/EU trade agreement.

The odds for a 25 bps rate cut by the Fed at the September meeting are at 90%, according to Prime Market Terminal data.

Source: Fxstreet

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