The euro climbed toward $1.145, rebounding from recent one-year lows as the US dollar weakened following a much softer-than-expected US employment report. The US economy created only 57,000 jobs last month, far short of forecasts, while the unemployment rate unexpectedly declined to 4.2% as many people exited the labor force.
The euro’s advance was capped, however, by weaker-than-expected Eurozone inflation data and dovish comments from ECB President Christine Lagarde. Headline inflation slowed to 2.8% in June from 3.2% in May, undershooting estimates, while core inflation eased to 2.4%, also below expectations.
Speaking at the ECB’s Sintra Forum, Lagarde noted that risks to both inflation and growth in the euro area had diminished, citing reduced energy price pressures since the central bank’s rate increase three weeks earlier. At the same time, optimism surrounding indirect US–Iran negotiations continued to weigh on oil prices, with Qatar indicating that a new round of talks would be scheduled soon.
