Euro holds near $1.19 ahead of delayed US jobs report

The dollar weakened against other currencies early Tuesday, with both the euro and the British pound extending gains from earlier in the week. Currency movements were largely attributed to a softer dollar rather than significant strength in the euro or pound.

Euro Performance

The euro held steady near $1.19 on Tuesday, following a 0.9% increase on Monday. This movement was primarily driven by the dollar’s decline rather than inherent euro strength. The British pound also saw gains, maintaining a position near $1.3670 despite ongoing political developments in the United Kingdom that were largely disregarded by traders.

Upcoming Economic Data

Traders are anticipating the release of several key economic reports this week. The US jobs report from the Bureau of Labor Statistics, typically released on the first Friday of the month, has been postponed due to the partial government shutdown and is now scheduled for Wednesday. The ADP print released last week indicated only 22,000 private jobs were added in January, falling short of expectations and raising concerns about US labor momentum. Current consensus estimates project around 55,000 jobs added.

Inflation Data and Future Outlook

The delayed US Consumer Price Index (CPI) inflation report is scheduled for release on Friday. This report is considered a crucial factor in assessing the potential timing of Federal Reserve interest rate cuts, which can significantly influence currency valuations. Lower inflation or weaker jobs data could further pressure the dollar and support the euro-dollar exchange rate above $1.19. Conversely, stronger data could reverse this trend. Until these reports are released, market participants are largely adopting a wait-and-see approach.