EUR/USD softens as US Jobless Claims keep the Dollar supported

The Euro (EUR) edges lower against the US Dollar (USD) on Thursday, with EUR/USD extending its slide as the Greenback builds on recent gains following the release of US weekly labour-market data. At the time of writing, EUR/USD trades around 1.1662, remaining on the back foot for a fifth consecutive day.

Data released by the US Department of Labor showed Initial Jobless Claims rose modestly to 208,000 in the week ended January 3, slightly below market expectations of 210,000 but above the previous week’s revised reading of 199,000.

The four-week moving average of Initial Jobless Claims fell to 211,750 from 219,000. Continuing Jobless Claims rose to 1.914 million from 1.858 million, pointing to a gradual increase in the number of people remaining on unemployment benefits.

Meanwhile, Nonfarm Productivity rose sharply to 4.9% in the third quarter from 3.3%, while Unit Labor Costs fell 1.9% after increasing 1% previously.

In reaction to the data, the US Dollar continues to firm, extending its advance for a third consecutive day. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 98.88, its highest level since December 10.

The data follow Wednesday’s mixed US labour signals. The ADP Employment Change report showed private payrolls increased by 41,000 in December, below expectations of 47,000 but reversing the previous month’s decline of 29,000. Separately, JOLTS data showed job openings fell to 7.146 million in November from 7.449 million, undershooting forecasts of 7.6 million.

Overall, the data suggest the US labour market is still in decent shape but is showing tentative signs of cooling. Attention now turns to Friday’s Nonfarm Payrolls (NFP) report, with economists forecasting a 60,000 rise in payrolls, following a 64,000 gain in the prior month. The outcome is likely to play a key role in shaping near-term Federal Reserve (Fed) expectations, with markets currently pricing in around two interest-rate cuts later this year.

Fed Governor Stephen Miran, whose term is set to end later this month, reiterated his dovish stance on Thursday. Miran said he is looking for about 150 basis points of rate cuts in 2026 and warned that the Fed is running “unnecessary risks” to the labour market. He also noted that policy remains “materially above” neutral, arguing that it is difficult to see current settings as consistent with a neutral stance.