EUR/USD Hangs in Balance Ahead of Crucial ECB Meeting

The EUR/USD is currently trading near 1.1627 after a strong US jobs report that came in almost three times above forecast.

The data supported the dollar and strengthened expectations of tighter Federal Reserve policy, with money markets raising the probability of a September rate increase to around 58% from roughly 52% before the data.

All eyes are now on the European Central Bank meeting on 10 September, where the rate increase is already fully priced in, and the guidance that follows will determine the euro’s next move.

The ECB meeting matters more than the decision itself because it's what Christine Lagarde says during the press conference that will have a significant impact on the market. If she confirms that further tightening remains under discussion, the euro could gain support against a dollar that is also pricing in higher rates.