The EUR/USD rallied back above 1.08 on Thursday, reversing recent losses as the U.S. dollar’s momentum faded amid weakening economic data. After a period of dollar strength driven by hawkish Federal Reserve expectations, the euro regained ground following softer U.S. data that cast doubt on the Fed’s ability to continue aggressive rate hikes.
The euro’s recovery comes as traders reassess their positions, particularly in light of signals that the U.S. economy may be cooling. Slower-than-expected job growth and weaker manufacturing figures weighed on the dollar, providing room for the euro to rally. In contrast, the European Central Bank’s tightening stance remains in focus, as inflation in the Eurozone continues to exceed target levels.
This rebound could signal a broader shift if market sentiment turns against the dollar, though some analysts caution that the euro remains vulnerable to fluctuations based on U.S. economic data and monetary policy updates. For now, the pair’s break above 1.08 signals a temporary respite for the euro after weeks of pressure from dollar strength.
Traders will continue to monitor upcoming U.S. and Eurozone data closely to gauge whether the EUR/USD rally can be sustained or if the dollar will reassert itself in the weeks ahead.
