EUR/USD posts modest gains below the mid-1.0800, US ISM PMI eyed

• EUR/USD posts modest gains around 1.0840 in early Tuesday.
• US factory orders fell 3.6% MoM in October versus a 2.3% rise prior.
• The European Central Bank (ECB)’s Luis de Guindos said tha recent inflation data is good news but it is too early to declare victory. 

The EUR/USD pair snaps the four-day losing steaks during the Asian trading hours on Tuesday. That being said, the renewed US Dollar (USD) lends some support to the pair. The major pair currently trading around 1.0840, gaining 0.05% for the day.

On Monday, the US Census Bureau showed that the US factory orders fell 3.6% MoM in October from a 2.3% rise in the previous reading. Earlier, the US ISM Manufacturing PMI came in weaker than expected and remained unchanged at 46.7 in November, the Institute for Supply Management (ISM) showed on Friday.

The Federal Reserve (Fed) Chair Jerome Powell claimed that U US monetary policy was slowing the economy as expected, with the benchmark overnight interest rate well into restrictive territory. While Powell emphasized the Fed’s willingness to tighten policy further if necessary, markets were confident the rate-hike cycle was done. This, in turn, weighs on the Greenback across the board.

Across the pond, the slowdown in inflation brings the ECB’s 2% inflation target back into clear focus for the first time since the summer of 2021, potentially signaling an adjustment in monetary policy. European Central Bank (ECB) Vice President Luis de Guindos said on Monday that recent inflation data is good news but it is too early to declare victory while mentioning that monetary policy stance will be data-dependent.

Moving on, traders will keep an eye on the ISM Services PMI and JOLTS Job Openings data on Tuesday. Later this week, Wednesday’s ADP will be released. The attention will shift to Friday’s Nonfarm Payroll (NFP) report, which is estimated to create 180K jobs in the US economy.