EUR/USD wobbles around 1.1760 amid holiday in US on account of Independence Day

• EUR/USD trades sideways around 1.1760 in a holiday-thinned trade.

• Better-than-projected US NFP data has offered some relief to the US Dollar.

• Risks to inflation undershooting the ECB’s 2% target have escalated amid an appreciating Euro.

The EUR/USD pair trades in a tight range around 1.1760 during the Asian session on Friday. The major currency pair exhibits a lackluster performance amid a holiday in the United States (US) markets on account of Independence Day.

The US Dollar (USD) holds the recovery move stemming from better-than-projected Nonfarm Payrolls (NFP) data for June. The data showed on Thursday that the US economy added 147K fresh workers, higher than expectations of 110K.

Better-than-projected NFP data has offered some relief to the US Dollar; however, it is unlikely to sustain as the report shows that the private sector hiring was losing momentum. Private employers added 74K workers in June, way below compared to the three-month average of 115K. This scenario is unlikely to provide relief to a few Federal Reserve (Fed) officials, including Vice Chair for Supervision Michelle Bowman, who argued in favor of reducing interest rates in the policy meeting later this month after citing potential labor market risks.

Meanwhile, investors are cautious as the July 9 tariff deadline approaches, and US President Donald Trump has stated that he will send letters to those nations with whom a trade agreement has not been finalized, outlining the tariff rates.

In the Eurozone region, a sharp appreciation of the Euro (EUR) has triggered fears that inflation may undershoot the European Central Bank’s (ECB) 2% target. According to a senior ECB official, "The ECB may need to signal that too much strengthening in the euro could be an issue, as it might lead inflation to hover below targets, Financial Times (FT) reported.

The scenario of strengthening the domestic currency often diminishes the competitiveness of products from export-oriented firms, which forces them to offer products to home country at lower rates.