The EUR/USD currency pair posted modest gains, trading around 1.1540 during the early Asian session on Friday, as traders prepared for the release of the US Nonfarm Payrolls (NFP) report for March later in the day. Trading volumes were expected to be thin due to the Good Friday holiday, which may have contributed to subdued market activity [1].
Hawkish rhetoric from the European Central Bank (ECB) has provided support for the Euro. ECB policymaker Francois Villeroy de Galhau stated on Thursday that the central bank’s next interest rate move will very likely be an increase, although he cautioned that it is still too early to specify when the hike will occur. Market participants are now pricing in nearly an 81.0% probability of a 25 basis point rate hike at the upcoming ECB meeting scheduled for April 30, according to the ECBWatch Tool [1].
Geopolitical tensions in the Middle East, which have entered their second month, are also influencing market sentiment. The ongoing conflict could push crude oil prices higher and bolster the US Dollar as a safe-haven currency. US President Donald Trump commented on Thursday about the destruction of a bridge in Tehran, Iran, warning of further actions and urging Tehran to negotiate. In response, Iran’s foreign minister Abbas Araghchi stated that recent US strikes on civilian infrastructure would not force Iran to back down, describing the actions as indicative of an enemy in disarray [1].
No specific analyst opinions or forward-looking statements regarding the EUR/USD pair’s direction were provided beyond the ECB rate hike speculation and the anticipation of the US NFP report [1].
CONCLUSION
EUR/USD saw modest gains as traders awaited the US NFP report and responded to hawkish ECB signals, with an 81% probability priced in for a 25 bps rate hike at the April 30 meeting. Geopolitical tensions in the Middle East and thin trading volumes due to the holiday also shaped market sentiment. The market remains focused on upcoming economic data and central bank decisions.