EURUSD extended gains as the US dollar falls following mixed US data.

The EURUSD pair extends its advances for the second day in a row, nudging up to about 1.0880 during Friday’s European session. The EURUSD strengthened after mixed economic statistics from the United States (US).

The Euro may face hurdles as markets anticipate an ECB interest rate drop in June.

Furthermore, low US Treasury yields add to the pressure on the US dollar (USD). US Treasury yields fell as regional bank New York Community Bancorp reported heightened stress in its commercial real estate portfolio. The Euro fell after lower German consumer inflation figures were released on Wednesday, as market sentiment shifted toward the prospect of a speculative interest rate decrease by the European Central Bank (ECB) in June. However, the European currency began to recover following the release of mixed Eurozone inflation data on Thursday.

The predicted fall in US nonfarm payrolls may further weaken the US dollar.

The US Dollar Index (DXY), which measures the performance of the US dollar (USD) against a basket of six major currencies, is struggling to recover from recent losses. The DXY trades around 103.00, while the 2-year and 10-year US Treasury yields are about 4.23% and 3.88%, respectively, at the time of writing.

US Initial Jobless Claims increased to 224K for the week ending January 26, surpassing both the prior increase of 215K versus the predicted figure of 212K. However, ISM Manufacturing PMI rose to 49.1 from 47.1 the previous month, exceeding the expected number of 47.0 for January. Key labor data, such as US average hourly earnings and nonfarm payrolls (NFP), are scheduled to be announced on Friday.

Daily market movers: EURUSD extends gains following mixed US economic data.

In January, the Eurozone preliminary Core Harmonized Index of Consumer Prices (YoY) climbed by 3.3%, exceeding the projected 3.2% increase but falling short of the previous 3.4%.

The yearly Consumer Price Index was 2.8%, as expected, compared to the previous reading of 2.9%. The month-over-month report showed a 0.4% fall, reversing the 0.2% increase in December.

The German Consumer Price Index (CPI) for January The year-on-year gain was 2.9%, lower than the projected 3.3% and lower than the 3.7% estimate in December.

Consumer inflation in Germany increased to 0.2% MoM from 0.1% the prior month, meeting forecasts. The Harmonized Index of Consumer Prices climbed 3.1% year on year, a decrease from the prior number of 3.8%.

The preliminary US Nonfarm Productivity climbed by 3.2% in Q4, more than the projected 2.5% but less than the prior reading of 4.9%.

US Challenger Job Cuts increased to 82,307 in January from 34,817 in December.

US unit labor costs rose 0.5%, compared to 1.7% predicted in the fourth quarter, reversing the prior 1.1% fall.