EUR/USD remains capped below 1.0800, all eyes are on US NFP data

• EUR/USD attracts some sellers around 1.0791 on Friday.
• The Eurozone GDP for Q3 came in at 0% YoY vs. 0.1% prior.
• US weekly Initial Jobless Claims came in weaker than expected, rising to 220K.
• US Nonfarm Payrolls (NFP) and Unemployment Rate will be the highlight on Friday.

The EUR/USD pair remains capped below the 1.0800 mark during the early Asian session on Friday. The Eurozone’s prospects remain gloomy and the markets believe the European Central Bank (ECB) will front-run the Federal Reserve (Fed) for rate cuts, which weigh on the Euro (EUR). At press time, EUR/USD is trading at 1.0791, down 0.03% on the day.

The Eurozone economy unexpectedly slowed in the third quarter (Q3) of 2023. The Gross Domestic Product (GDP) came in at 0% YoY versus 0.1% prior, worse than the expectation. On a quarterly basis, the growth number contracted 0.1, in line with the market forecast.

ECB board member Isabel Schnabel stated last month that rate hikes must remain an option in case inflation does not return fast enough to the 2% target. However, she had shifted her stance after three surprisingly low inflation readings in a row. The markets are aggressively pricing the European Central Bank (ECB) to cut interest rates earlier than expected, with the first move now seen as soon as March 2024.

Across the pond, data from the US Labor Department on Thursday revealed that the US weekly Initial Jobless Claims for the week ending December 1 increased to 220K, falling short of the market forecast of 222K. Continuing Claims fell to 1.861 million from 1.925 million, below the market consensus of 1.919 million.

Moving on, investors will keep an eye on the US employment report on Friday, including Nonfarm Payrolls (NFP), Unemployment Rate, Average Hourly Earnings, and the University of Michigan’s Consumer Sentiment Index. The Nonfarm Payrolls are expected to increase by 180K and the Unemployment Rate is forecast to remain steady at 3.9%. Traders will take cues from these figures and find trading opportunities around the EUR/USD pair.