EUR/USD Hits Five-Day Losing Streak, Edges Toward 1.0200

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The EUR/USD pair remains under pressure for a fifth consecutive day, trading near 1.0215 during Monday's early European session.

The US Dollar (USD) strengthened following robust US employment data for December, reinforcing expectations that the Federal Reserve (Fed) will maintain its current interest rates at the January meeting.  

December saw an unexpected surge in US job growth, while the unemployment rate dipped to 4.1%, boosting the USD. Markets now anticipate the Fed will hold rates steady in January, with futures indicating a shift toward the likelihood of just one rate cut this year. According to the CME FedWatch tool, the probability of a single rate cut has risen to 68.5% following the employment data release.  

"The strong nonfarm payroll growth and solid earnings gains provide a firm foundation for the U.S. economy as the year begins, likely keeping the Fed on hold at the January meeting," said Scott Anderson, chief U.S. economist at BMO Capital Markets.  

Meanwhile, dovish signals from the European Central Bank (ECB) could weigh on the Euro (EUR) against the USD. Markets are forecasting four rate cuts by the ECB, anticipated at each meeting through summer. ECB policymaker François Villeroy stated last week that while inflation pressures might see a slight uptick in December, interest rates will continue advancing toward a neutral level without slowing down before summer.

Paraphrasing text from "Investing.com" all rights reserved by the original author.