Euro Rebounds Powerfully Today

Euro Gets a Squeeze – It Cradles a Tiny Victory Over the Dollar

Just after lunch (about 1:30 pm GMT), the euro put on a subtle boost, inching up roughly 0.06 % versus the U.S. dollar. With the market having been kind of flat and eye‑rolling all week, that little bump felt like a cozy sign of optimism.

What’s Behind the Euro’s Puffer?

Soft U.S. Jobs – ADP’s data showed only 107 thousand private‑sector jobs added in January, a far cry from the 148 thousand people the market had hoped for. The previous estimate of 158 thousand even fell off.
Eurozone Inflation Takes a Dip – Germany’s annual inflation slid to 2.9 % from 3.7 %, and the rest of the bloc mirrored the slowdown. Energy prices fell almost 3 %, while services nudged up to 3.4 %.
Import Price Bonanza in Germany – Prices on German imports fell 8.5 % year‑on‑year, partly because natural gas prices were nearly halved. On a monthly basis they dipped 1.1 %, the fastest drop since last June.
Employment & Unemployment Numbers – Germany’s unemployment rate stuck at 5.8 % this January (fourth straight month). Italy’s unemployment fell to a low of 7.2 %, the deepest slide since mid‑2020. France’s inflation dropped to 3.1 % from 3.7 % and prices contracted 0.2 % month‑on‑month.

Why We’re All Watching The FOMC’s Next Move

As the Federal Open Market Committee (FOMC) gears up to announce its next policy decision, traders are clutching their coffees, hoping for clues about whether rates will climb, stay put, or dive. Given the warehouse of strong data we’ve been witnessing this month, market participants expect to read between the policy speeches and glean any hint of where the Fed might be headed.

In short, the euro’s modest lift is a ribbon of hope stitched into a week that has been a bit of a tug‑of‑war. While the U.S. job numbers and European inflation are both acting like lemmings moving back to the ground, we’re all waiting to see whether the Fed will jump on the bandwagon.