EUR/USD Edges Up Ahead of US Jobs Data and ECB Rate Hike Expectations
The EUR/USD exchange rate edged up to around 1.1536 on Wednesday as the US Dollar ticked lower ahead of the ADP Employment Change data for July, which was released at 12:15 GMT.
The data showed that US private employers hired 70K fresh workers in July, lower than the estimated 98K in June. This figure is significant for the Federal Reserve's interest rate expectations, as officials have stopped providing forward guidance.
Meanwhile, the Euro is expected to trade strongly amid firm expectations of an ECB interest rate hike in September. Market pricing remains aligned with TD Securities' policy outlook, which sees a 25bp ECB rate hike as the base case for the upcoming meeting.
ECB Governing Council member Martin Kocher emphasized that the central bank is committed to bringing inflation down to 2% on a sustainable basis, and will decide in autumn based on incoming data. However, he also noted that geopolitical developments can alter energy prices and inflation outlook, which may pose risks for the Euro area.