EUR/USD edges higher to fresh multi-week tops around 1.0950, eyes on Eurozone GDP, US NFP data

The EUR/USD pair gains ground to new multi-week tops around the mid-1.0900s during the early Asian trading hours on Friday. The European Central Bank (ECB) decided to leave its monetary policy unchanged on Thursday as the central bank is still on course to bring inflation back to its target range. The attention will shift to US Nonfarm Payrolls (NFP) on Friday. The major pair currently trades around 1.0947, adding 0.01% on the day.

On Thursday, the ECB kept the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 4.5%, 4.75%, and 4.0%, respectively. The central bank said it will keep policy appropriately restrictive for as long as necessary to bring inflation down to the ECB’s target. However, a first rate cut at the June meeting is probable if the evidence of inflation continues to improve.

Across the pond, the Fed Chair Jerome Powell said on Thursday that interest rate cuts may not be too far off if inflation signals cooperate. However, Powell emphasized that the timing and scale of rate cuts will depend on the data. Investors anticipate the first cut to come in June, with four reductions totaling a full percentage point by the end of 2024.

Investors will closely watch the US February labor market report on Friday, including US Nonfarm-Payrolls, Unemployment Rate, and Average Hourly Earnings. The labor market data for February will be a key factor in the FOMC's assessment of the current and prospective inflation trajectory. On the Euro docket, the revision of the Eurozone GDP Growth Rate will be due later in the day. These events could give a clear direction to the EUR/USD pair. 

(The story was corrected on March 8 at 02:25 GMT to say, in the headline, that EUR/USD edges higher to fresh multi-week tops ahead of US NFP data, not GDP data.)