EUR/USD Treads Water as Strong US Jobs Data Boosts Fed Hopes

The EUR/USD exchange rate held steady at around 1.1620-1.1630 at the start of the week, maintaining some resilience despite Friday's strong US labor market report.

The NFP data showed that the US economy added 162,000 jobs in August, exceeding expectations of 53,000-58,000, and keeping the unemployment rate steady at 4.1%. The July figure was also revised from a decline of 23,000 to an increase of 21,000.

The strong labor market report boosted Fed rate-hike expectations, with the probability of a September rate hike rising from around 49% to 60%.

However, despite the hawkish Fed outlook, the euro's upside potential remains limited due to the ECB's high probability of raising interest rates. The recent weak macroeconomic data from Germany, including a decline in industrial production and automobile output, further supports this view.