**EUR/USD Holds Above 1.0800 as Dollar Eases Following Softer Data**
*By Mitrade News Team*
The EUR/USD currency pair maintained its footing above the 1.0800 threshold in early European trading on September 4, 2025, as investors digested recent economic data from the United States and Eurozone. The pair remained stable as the US dollar showed signs of weakness following a slew of softer US macroeconomic releases that have raised market concerns over the strength of the world’s largest economy.
This article provides an in-depth analysis of the recent price action in EUR/USD, the fundamental outlooks driving the pair, key technical levels, and market sentiment ahead of upcoming central bank meetings and high-impact economic reports.
**Dollar Softens on Weaker US Data**
The US dollar index (DXY) lost ground as markets reacted to signals of moderating momentum in the US economy. Particularly influential in this development has been the latest batch of US labor and activity data.
Key data releases and highlights include:
– The ISM Manufacturing PMI for August fell to 47.8, underperforming consensus estimates of 48.5 and marking the sixteenth consecutive month of contraction in factory activity.
– The ADP private employment report showed a gain of 145,000 jobs in August, which was softer than the projected 180,000, signaling potential cooling in the labor market ahead of the closely watched Nonfarm Payrolls (NFP) report.
– The Job Openings and Labor Turnover Survey (JOLTS) came in below expectations, pointing to slack in the jobs market.
– Construction Spending for July grew by 0.4% month-on-month, missing the forecast of 0.6%, and indicating subdued momentum in one of the more resilient sectors of the US economy.
– Consumer Confidence readings have also seen a downward revision, reflecting greater apprehension among households.
This collection of weaker-than-expected indicators has prompted markets to further scale back their expectations of further aggressive rate hikes from the US Federal Reserve. Traders are increasingly betting that the Fed will hold rates steady for the remainder of the year, with some starting to price in the likelihood of rate cuts as early as the first half of 2026.
**Eurozone Updates Support Euro Stability**
On the Eurozone front, the single currency has found some support amid tentative signs of resilience in certain pockets of the bloc’s economy despite ongoing structural headwinds.
Highlights from the Eurozone include:
– Spanish, Italian, French, and German Manufacturing PMIs mostly improved marginally in August but generally remained below 50, pointing to continued contraction in the sector but at a potentially slowing pace.
– German unemployment statistics for August were in line with forecasts, helping to alleviate concerns about deterioration in the job market of Europe’s largest economy.
– Inflation figures have stabilized, with headline CPI in the Eurozone steadying close to the European Central Bank’s target, though core inflation remains somewhat sticky.
– The latest sentiment surveys reflect cautious optimism among businesses and consumers, with expectations of a modest recovery as energy prices soften and supply chains normalize.
These factors, while not overly bullish for the euro, have kept EUR/USD supported above key technical levels, particularly as the greenback loses momentum.
**Key Themes Driving EUR/USD**
The current landscape for EUR/USD is defined by the interplay between the following themes:
– **Interest Rate Expectations:** Changing market perceptions about the Fed’s ability and willingness to hike rates further given evidence of slowing activity versus the ECB’s data-dependent stance.
– **Economic Divergence:** Relative outperformance or underperformance in macroeconomic data between the US and Eurozone, influencing flows between the two currencies.
– **Risk Sentiment:** Shifts in global risk appetite, as equity market volatility, political uncertainties, and economic growth projections impact demand for safe-haven or risk-sensitive assets.
– **Geopolitical Developments:** Ongoing events in Eastern Europe, energy security, and trade relations continue to influence
Read more on GBP/USD trading.