EUR/USD rebounds from 1.0900 as tight US labor market cools down further

• EUR/USD has shown recovery from 1.0900 amid signs of softening the US labor market.
• US firms have slowed down their hiring process amid rising interest rates by the Fed and a bleak economic outlook.
• The ECB would continue its policy-tightening process ahead.

The EUR/USD pair has sensed support after dropping to near the round-level support of 1.0900 in the early Asian session. The major currency pair has attempted a recovery after falling to near 1.0900 as the tight United States labor market has cooled down further after US Employment data released by Automatic Data Processing (ADP) missed estimates.

As per the released data, the US economy added 145K jobs in March, significantly lower than the estimates of 200K and the former release of 242K. Firms have slowed down their hiring process amid rising interest rates by the Federal Reserve (Fed) and a bleak economic outlook. A slowdown in the recruitment process after the release of weak Job Openings data indicates that the US labor market has started cooling off and chances are solid of an escalation in the Unemployment Rate ahead.

Meanwhile, S&P500 settled Wednesday’s session with some losses as the risk of recession has been fuelled further after the release of the downbeat US ISM Services PMI data, portraying a risk appetite theme. The US Dollar Index (DXY) rebounded to near 102.00 after defending the fresh monthly low above 102.40. The demand for US government bonds soared as weak Services PMI and a slowdown in payroll numbers have confirmed that the Fed will favor an unchanged interest rate decision ahead. The 10-year US Treasury yields have sipped sharply below 3.31%.

In Eurozone, the survey of consumer expectations for inflation, conducted by the European Central Bank (ECB) on a monthly basis showed that median inflation expectations for the next 12 months have fallen to 4.6% in February vs. 4.9% recorded in January. Constantly rising rates by European Central Bank President Christine Lagarde to tame sticky Eurozone inflation has trimmed consumer inflation expectations.