Ella 
In early Asian trading on Monday, EUR/USD strengthened to around the mid-1.0900 level. The overall U.S. non-farm payrolls data for February released on Friday showed that U.S. labor market activity remains strong. The U.S. dollar was lower against the euro (EUR) as the Federal Reserve was expected to start cutting interest rates in June. EUR/USD is currently trading around 1.0942, with an intraday increase of 0.06%.
The U.S. Bureau of Labor Statistics (BLS) reported on Friday that the U.S. economy added 275,000 jobs in February, higher than the consensus estimate of 229,000. The unemployment rate climbed to a two-year high of 3.9% in February from 3.7% in January. Finally, average hourly earnings increased at an annual rate of 4.3% in February, compared with 4.4% in the previous month. Federal Reserve Chairman Jerome Powell said in a speech to the Senate Banking Committee on Friday that more confidence is needed before the Fed is ready to cut interest rates, but they are not far away.
In the euro, the European Central Bank (ECB) last week met market expectations and kept borrowing costs at record high levels. European Central Bank President Christine Lagarde maintained a cautious tone, stressing that the European Central Bank needs more evidence before cutting interest rates. In addition, data released by Eurostat on Friday showed that the euro zone’s gross domestic product in the fourth quarter of 2023 was flat on a monthly basis and at an annual rate of 0.1%.
Next up are U.S. and German inflation data for February on Tuesday. On Thursday, U.S. retail sales will be in focus. These events could help clarify Fed officials’ considerations of when it would be appropriate to begin cutting interest rates. Traders will take cues from this data and look for EUR/USD trading opportunities from it.
