Published on 10.03.2023 16:32

The Euro has jumped against the US dollar and may be headed for a strong finish at the end of the trading week after the release of the latest Nonfarm Payrolls data from the US which showed the aggressive rate hikes from the US Federal reserve may finally be paying dividends.

According to the release, the US economy added 311K jobs during February, against analysts’ expectations for a gain of 205K jobs and well below last month’s completely unexpected figure of 504k.

The Unemployment Rate ticking higher to 3.6%, up from 3.4 percent and the key Average Hourly Earnings – a proxy for inflation via wages rose to 0.2 percent MoM and 4.6% from a year earlier. Additionally, the Participation Rate increased slightly to 62.5% from 62.4%.

The news is a life saver for the European currency as some analysts had been predicting a return to parity with the greenback if the economic news had come in more solidly and it seems for now that danger has been averted.

Looking further ahead today, the main driver of the EUR/USD currency pair will be the release of a monetary speech by ECB president Christine Lagarde where the question of further interest rate hikes from the ECB will certainly be discussed.

A 50-basis point rate hike from the ECB this moth is already priced into the Euro so the main focus will be on any further rate hikes and the intended size moving forward.