The EUR/USD exceeds 1.1700 after weak employment data in the U.S.

The euro (EUR) surged against the US dollar (USD) on Friday after the US non-farm payroll report (NFP) disappointed with only 22,000 jobs added in August, far below the expected 75,000 and the revised 79,000 from July (revised from 73,000). The unemployment rate rose to 4.3% from 4.2%, while average hourly earnings increased by 0.3% month-on-month and 3.7% year-on-year, in line with forecasts. The EUR/USD rose more than 40 pips to trade around 1.1740, a nearly 0.70% increase on the day.

The weaker employment data highlighted the ongoing weakness in the U.S. labor market, reinforcing expectations that the Federal Reserve (Fed) will cut rates at its meeting on September 16-17. Although markets are already pricing in a 25 basis point cut, the weak employment figure could fuel speculation about the possibility of a larger 50 basis point move to counteract slower growth.

U.S. Treasury yields plummeted in response, with the 10-year bond falling to 4.09% and the 2-year rate-sensitive bond dropping to 3.50%, both at their lowest levels since April 7. The sharp decline in yields reflected rising expectations for greater easing by the Fed, adding more pressure on the dollar.

The US dollar index (DXY), which tracks the greenback against six major pairs, weakened sharply after the release, falling below 98.00 to trade near 97.65, a drop of nearly 0.65% on the day. The index is hovering around the lower end of the narrow range established since August.

Meanwhile, the EUR/USD is also testing the upper end of its recent range near 1.1730. A break above this level could open the way toward the high of July 24 at 1.1789, while immediate support is seen at 1.1700 and the 50-day moving average at 1.1666.

Implications for the cryptocurrency market

The weakness of the US dollar following employment data could have a significant impact on the cryptocurrency market. Historically, a weaker dollar has tended to benefit assets like Bitcoin (BTC) and Ethereum (ETH), as investors seek alternatives to protect their wealth.

Traders on leading CEX platforms should be on the lookout for potential bullish movements in major crypto assets, especially if the EUR/USD continues to gain ground. The inverse correlation between the USD and cryptocurrencies could intensify in this macroeconomic environment.

Moreover, expectations of rate cuts by the Fed could increase the appetite for risk assets, including cryptocurrencies. Investors in cryptocurrency exchanges may see an increase in trading volumes and volatility in the upcoming sessions.

It is important for users of CEX platforms to closely monitor the evolution of traditional and cryptocurrency markets, as movements in the EUR/USD pair could be indicative of broader trends affecting digital assets.