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    EURUSD rallies on weak US jobs data: Best day since November 2023 

    August 6, 2024

    Key Points: 

    • EURUSD surges 1.3%, marking its best session since November 2023 
    • Nonfarm payrolls for July disappointed significantly, coming in at 114,000 against expectations of 174,000. 

    The EURUSD currency pairs experienced a strong rally and continued to gain momentum. The European currency surged 1.3% to log its best trading day since November, driven by a substantial sell-off in the US dollar following dismal nonfarm payrolls data. 

    Euro climbed to a session high of $1.0926 last Friday, erasing the losses accumulated over the past couple of weeks. The bullish sentiment carried on to Monday, with the pair trading up to $1.0970. 

    EURUSD-ECN chart displaying a slight downtrend of -0.19%. The chart shows an open at 1.09469, a close at 1.09257, a high of 1.09631, and a low of 1.09220. The chart includes various moving averages (5, 10, 20, 30) and a MACD indicator (12, 26, 9).

    Picture: EURUSD rallies 1.3% on weak US jobs data, as observed on the VT Markets app.  

    Impact of weak US jobs data 

    The US dollar was heavily impacted by the weak jobs report, which showed that the US economy added only 114,000 jobs in July, well below the expected 174,000.

    This miss raised concerns about the strength of the US labour market, particularly with interest rates sitting at a 23-year high.

    The challenging environment for job growth has increased market expectations for a more substantial rate cut by the Federal Reserve in September, with some analysts now anticipating a 50 basis point cut instead of the previously expected 25 basis points. 

    The disappointing jobs data has shifted market dynamics, leading investors to offload the US dollar in favour of other currencies. Lower interest rates typically reduce the appeal of a currency as they lead to lower yields. 

    Related content: Interest rate tug-of-war for central banks 

    Recent strength from the euro is also attributed to a broader shift in market sentiment, with traders looking for safer havens amid concerns about the US economy. This shift has provided the euro with a significant boost, allowing it to recover from recent lows and move towards higher levels. 

    Short term outlook for EURUSD 

    For short-term traders, the current movements in the EURUSD pair present a range of opportunities. The recent surge in the euro, driven by weak US jobs data and expectations of a rate cut, suggests potential for further volatility. 

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