EUR/USD gathers strength around the mid-1.0900s, US, German CPI data eyed

The EUR/USD pair holds positive ground around the mid-1.0900s during the early Asian trading hours on Monday. The overall view of the US February Nonfarm Payrolls data on Friday suggested labor market activity in the US remains strong. With the prospect that the Fed will begin the first cut in June, this drags the Greenback lower against the Euro (EUR). The major pair currently trades near 1.0942, gaining 0.06% on the day. 

The US economy added 275K jobs in February from 229K in the previous month, above the consensus of 200K, the US Bureau of Labor Statistics (BLS) reported on Friday. The Unemployment Rate ticked higher to a two-year high of 3.9% in February from 3.7% in January. Finally, wage growth, as measured by Average Hourly Earnings, rose by 4.3% YoY in February versus 4.4% prior. Fed Chair Powell stated in his remarks to the Senate Banking Committee on Friday that more confidence is needed before the central bank is ready to lower the rate, but they’re not far from it.

On the Euro front, the European Central Bank (ECB) kept borrowing costs at record highs last week, as broadly expected. ECB President Lagarde maintained a cautious tone, emphasizing that more evidence was needed before the ECB cut rates. Furthermore, Eurostat showed on Friday that the Eurozone Gross Domestic Product (GDP) for the fourth quarter (Q4) of 2023 was flat MoM and grew 0.1% YoY. 

Moving on, the US and German February CPI inflation data will be due on Tuesday. On Thursday, US Retail Sales will take center stage. These events might help Fed officials consider when it might be appropriate to begin cutting interest rates. Traders will take cues from the data and find trading opportunities around the EUR/USD pair.