Euro flatlines as traders await US jobs report

The EUR/USD pair holds steady around 1.1620 during the early Asian session on Friday. Traders prefer to wait on the sidelines ahead of the key US economic data. The US jobs data for May will be the highlight later in the day. 

Stronger-than-expected US May ADP private payrolls and JOLTS job openings data released earlier suggested a resilient US labor market. Traders will take more cues from the US Nonfarm Payroll (NFP) figure for fresh impetus. The US economy is projected to see 85,000 jobs added in May, while the Unemployment Rate is projected to remain steady at 4.3% during the same period.

Any signs of improvement in the US labor market might prompt traders to raise their expectations that the Federal Reserve (Fed) will keep interest rates higher for longer, supporting the US Dollar (USD) against the Euro (EUR). Markets are now pricing in nearly a 42% chance of a Fed rate hike in December, according to the CME FedWatch Tool.  

On the Euro front, the hawkish stance of the European Central Bank (ECB) might help limit the EUR’s losses. The ECB is likely to raise its deposit rate to 2.25% at its upcoming June policy meeting, with another increase likely in September, a Reuters poll of economists showed.