EUR/USD recorded a slight gain at 1.1760 after a two-day rally on Tuesday. The US dollar remained on the defensive as investors anticipated a sharp downward revision to US employment figures, although the political crisis in France continued to weigh on positive sentiment for the euro (EUR).

The US Bureau of Labor Statistics is expected to release its seasonally adjusted employment data for the 12 months to March 2025 at 14:00 GMT. Markets are expecting a decline of up to 800,000 jobs, which would reflect a weaker-than-expected labor market and likely prompt the Federal Reserve (Fed) to accelerate its monetary easing cycle.

Such a scenario would add pressure to the already depressed US dollar (USD), which weakened more than 1% against a basket of major currencies following the release of the August payrolls report on Friday. Futures markets are fully pricing in a Fed rate cut next week, with the odds of a 50 basis point cut rising above 10%, according to the CME Group's FedWatch Tool.

In Europe, the uncertain political landscape in France is hampering further appreciation of the euro (EUR). Prime Minister François Bayrou lost a no-confidence vote on Monday, and news reports indicate that President Emmanuel Macron is refusing to call snap elections and wants to nominate a new prime minister "within days." (alg)

Source: FXstreet