Euro Surges on Weak US Jobs Data, Interest Rate Hike Odds Plummet

The Euro rebounded above 1.1250 on Friday after weak US jobs data weighed heavily on the US Dollar. The release of employment figures for September showed that employers added only 29,000 jobs, significantly lower than market expectations of 90,000.

This weaker-than-expected labor report led to a decline in expectations surrounding the Federal Reserve's next monetary policy decision. According to the CME FedWatch tool, markets now assign around a 17% chance to an interest rate hike in October, down from roughly 24% before the NFP release and 64% a week earlier.

The US Dollar Index (DXY) fell by approximately 0.23% following the publication of the employment report, trading near 101.80 at the time of press. Meanwhile, the Eurozone inflation accelerated to 3.8% YoY in September from 3.2% in August, exceeding expectations of 3.6%, which could put pressure on the European Central Bank (ECB) to maintain a restrictive monetary stance.