Strong US Payrolls Could Cap Euro Gains

Commerzbank's foreign exchange strategists are warning that the euro's recent gains against the US dollar may be limited by upcoming US payrolls data.

The bank suggests a strong jobs report could reinforce the Federal Reserve's cautious stance on rate cuts, providing fresh support for the greenback.

According to Commerzbank, the euro's upside is capped not only by US data but also by the European Central Bank's own policy trajectory. With the ECB in a wait-and-see mode, the interest rate differential may not widen further in favor of the euro.