The EUR/USD pair edged lower to near 1.1905 during early European trading on Tuesday, ending a two-day advance. Traders remained cautious ahead of key US economic releases, including employment and inflation data that were delayed following the recent four-day government shutdown.
White House economic adviser Kevin Hassett said on Monday that US job creation could slow in the months ahead, citing softer labor force growth and rising productivity as potential factors.
The US Nonfarm Payrolls report, scheduled for release on Wednesday, is expected to show job gains of around 70,000 in January, while the Unemployment Rate is forecast to remain unchanged at 4.4%. A weaker-than-expected outcome could pressure the US Dollar and offer support to the euro. Conversely, signs of resilience in the labor market may strengthen the Greenback against the single currency.
In the Eurozone, the European Central Bank kept its key interest rate unchanged at 2.0% for the fifth consecutive meeting last week, in line with expectations. Speaking at the post-meeting press conference, ECB President Christine Lagarde reaffirmed that policy decisions would remain data-driven and assessed on a meeting-by-meeting basis, ruling out any commitment to a preset rate path.
According to a January Reuters poll, roughly 85% of economists expect the ECB to maintain its current interest rate levels throughout the remainder of 2026.
