EUR/USD has gained momentum and surpassed the 1.0950 mark during the American session on Wednesday. The rise in the currency pair comes after the ADP report showed that employment in the private sector rose by 145,000 in March, which is lower than the expected addition of 200,000 jobs. This weaker-than-expected data caused the USD to weaken against the EUR, putting upward pressure on the currency pair.
The ADP report is seen as a precursor to the non-farm payroll (NFP) report, which is expected to be released on Friday. The NFP report is considered a critical indicator of the overall health of the US economy and is closely watched by traders and investors. The weaker-than-expected ADP report has led some analysts to lower their expectations for the NFP report, which could have an impact on the USD in the coming days.
The disappointing ADP report also adds to concerns about the state of the US labor market. With the COVID-19 pandemic still raging on, many businesses are struggling to recover, and the unemployment rate remains elevated. This has put pressure on the Federal Reserve to maintain its accommodative monetary policy stance to support the economy’s recovery.
The rise in EUR/USD is also reflective of broader market sentiment. Risk appetite has improved as vaccine rollouts gather pace and as economic data in major economies continue to show signs of improvement. This has led to a weaker USD and stronger performance in other major currencies such as the EUR.
Looking ahead, traders will be watching the upcoming NFP report closely for further clues on the direction of the USD. In the meantime, the EUR/USD is likely to remain volatile as it reacts to various economic data releases and market sentiment.
