EUR/USD holds losses near 1.1650 ahead of Eurozone Retail Sales

• EUR/USD loses ground as Eurozone Retail Sales are anticipated to ease in July.

• Weaker July JOLTS data strengthened market expectations for a September Fed rate cut.

• Minneapolis Fed President Neel Kashkari warned that tariffs are driving up consumer goods costs, contributing to higher inflation readings.

EUR/USD edges lower after registering gains in the previous session, trading around 1.1650 during the Asian hours on Thursday. The pair loses ground ahead of Eurozone Retail Sales data. Traders will shift their attention toward the weekly Initial Jobless Claims, the ADP Employment Change, and the ISM Services Purchasing Managers Index (PMI) due later in the North American session.

Eurozone Retail Sales are anticipated to climb by 2.4% year-over-year in July, against the previous 3.1% increase. However, the monthly sales are expected to see a 0.2% decline, swinging from the previous increase of 0.3%. Attention will shift toward Eurozone Gross Domestic Product (GDP) for the second quarter and Germany’s July Factory Orders due on Friday.

However, the EUR/USD pair may regain its ground as the US Dollar (USD) could struggle as weaker-than-expected July JOLTS Job Openings boosted the odds of the Federal Reserve (Fed) rate cut in September. Job openings declined to 7.18 million from 7.35 million, marking the weakest level since September 2024 and missing forecasts of 7.4 million. The CME FedWatch tool indicates pricing in more than 97% of a 25-basis-point (bps) rate cut by the Fed at the September policy meeting, up from a 92% chance a day ago.

However, Minneapolis Fed President Neel Kashkari flashed another policy warning sign on Wednesday, cautioning that tariffs are pushing the consumer-facing costs of goods higher, resulting in climbing inflation figures. Kashkari also cautioned that the US economy is pivoting harder into a "soft landing" scenario. Meanwhile, Atlanta Fed President Raphael Bostic said that high inflation remained the Fed’s main risk, but added that signs of labour market weakness still pointed to a single quarter-point rate cut this year.