EUR/USD slipped after a stronger US jobs report boosted the US Dollar. The pair traded near 1.1875 after falling about 68 pips to an intraday low around 1.1833.
US Nonfarm Payrolls rose by 130K in January. That was above forecasts near 70K and higher than December’s revised 48K. The Unemployment Rate edged down to 4.3% from 4.4%.
Jobs Revisions Reshape The Outlook
The BLS revised March 2025 total nonfarm employment down by 898K. It also cut total 2025 job growth to 181K from 584K. That puts average monthly job growth in 2025 at 15K.
Average Hourly Earnings rose 0.4% month-on-month in January. That was up from 0.1% and above the 0.3% forecast. Annual wage growth held at 3.7% year-on-year, above the 3.6% estimate.
Interest-rate futures now nearly fully price the Fed policy rate to stay in the 3.50%–3.75% range at the March and April meetings, according to CME FedWatch. The US Dollar Index traded near 96.95 after an intraday low around 96.49.
The strong January jobs number is hard to square with the large downward revisions for 2025. The revisions suggest the economy was much weaker than previously thought, which muddies the outlook for the dollar. Over the next few weeks, EUR/USD may be tugged between strong recent data and a weaker underlying trend.
Rate Expectations Support The Dollar
Wage growth is still running at 3.7%, and last month’s CPI report showed core inflation remains sticky at 3.9%. That means the Federal Reserve has little reason to cut rates soon. Markets now expect a hold in March and April, which should help support the US dollar in the near term. As a result, aggressive bets against the dollar may be risky right now.
The European Central Bank faces a different backdrop. The Eurozone’s January flash inflation estimate cooled to 2.8%. That could allow the ECB to cut rates before the Fed. This policy gap may pressure the euro and limit meaningful upside in EUR/USD.
Mixed signals are also lifting options costs. One-month implied volatility for EUR/USD has pushed above 7.0%, showing traders are preparing for a larger-than-usual move. In this setting, buying volatility with strategies like straddles can make sense, since it can profit from a breakout in either direction.
For traders who expect the pair to stay stuck in a range, selling volatility may be the better fit. With strong technical levels in place, a range strategy such as an iron condor on EUR/USD options could be a sensible approach. This would benefit if EUR/USD stays choppy while the market digests the major revisions to last year’s data.
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