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The EUR/USD pair posts modest gains during the early Asian section on Thursday. However, the upside of the pair might be capped on the renewed US Dollar (USD) demand and weaker-than-expected Eurozone data. The major pair currently trades around 1.0770, gaining 0.08% on the day.
The US Dollar Index (DXY) climbs for three straight days despite weaker ADP employment data. On Wednesday, ADP private payrolls rose 103K in November from 106K in October. This figure came in worse than expected. Market players will take more cues from the US employment data this week, including the weekly Jobless Claims and Nonfarm Payroll.
The downbeat Eurozone Retail Sales exert some selling pressure on the Euro (EUR). The figure rose 0.1% MoM in October versus -0.1% in September, below the market consensus of 0.2%. On an annual basis, Eurozone Retail Sales fell from 2.9% to 1.2% in October, worse than the 1.1% drop expected. High interest rates, weak consumer confidence, and fading optimism about the labor market are all combined to dampen private consumption growth.
ECB board member Isabel Schnabel stated last month that rate hikes must remain an option because the last phase of the inflation fight may be the hardest. However, she had shifted her stance after three surprisingly low inflation readings in a row. The markets are aggressively pricing the European Central Bank (ECB) to cut interest rates by 142 basis points (bps) next year, with the first move now seen as soon as March 2024.Looking ahead, investors await the Eurozone Gross Domestic Product for the third quarter (Q3), which is estimated to remain steady at -0.1% QoQ. On the US docket, the weekly Jobless Claims will be due.
EUR/USD
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