The euro gained ground against the US dollar, climbing 0.37% to 1.1679 as the US Dollar Index dipped 0.25% to 98.06, following a series of disappointing economic releases from the United States. The latest Job Openings and Labor Turnover Survey (JOLTS) indicated a sharp decline in job vacancies, paired with a rise in layoffs, prompting analysts to assess the impact of tariffs on the worsening labor market conditions.
Specifically, the JOLTS report revealed that the number of job openings fell significantly from 7.437 million (previously revised to 7.357 million) in June to 7.181 million in July. While hiring saw a slight increase of 41,000, layoffs also rose by 12,000. Economists have pointed to the tariffs imposed by the Trump administration as a key contributing factor to the ongoing slowdown in the labor market.
Adding to the gloomy picture, US factory orders contracted by 1.3% month-over-month for July, a slightly better outcome than the anticipated decline of 1.4%. This contraction, along with a continuous decline in the ISM Manufacturing PMI—reflecting factory activity having contracted for the sixth consecutive month—heightened concerns regarding the overall health of the manufacturing sector.
In the midst of these developments, the US Dollar Index, which measures the dollar’s strength against a basket of six currencies, registered a decline, contributing to a boost for the euro amidst softer PMI data from the Eurozone. The HCOB Services PMI for August came in at 50.5, missing projections of 50.7, while Eurozone Producer Prices showed a monthly increase of 0.4% in July, down from 0.8% in June.
The market is now gearing up for the upcoming Nonfarm Payrolls report, set to be released on Friday. Economists expect an addition of 75,000 jobs for August, with an anticipated rise in the unemployment rate from 4.2% to 4.3%.
From a technical perspective, EUR/USD has firmly moved past the 1.1650 level, potentially paving the way for a test of the 1.1700 mark. While the Relative Strength Index (RSI) is showing bullish tendencies, it has not yet surpassed its previous peak, indicating a phase of consolidation over the last 14 days. If the pair surpasses the September 1 high of 1.1736, it may target 1.1800 and the year-to-date high of 1.1829. Conversely, a close below 1.1650 could open the door for a decline to 1.1600, with the 100-day simple moving average (SMA) seen at 1.1520.
In terms of currency performance this week, the euro has shown strength against several major currencies, particularly the Japanese yen. The euro’s changes against other currencies, including the US dollar and British pound, illustrate its resilience in the current market conditions.
