EUR/USD trades firmly near 1.1540 on renewed US labor market risks

• EUR/USD clings to gains around 1.1540 as the US Dollar turns fragile.

• Rising US labor market risks have slightly prompted Fed dovish expectations.

• ECB’s de Guidos stated that he is comfortable with current interest rates.

The EUR/USD pair holds onto Thursday’s gains around 1.1540 during the late Asian trading session on Friday. The major currency pair exhibits strength as the US Dollar (USD) faces selling pressure due to renewed United States (US) labor market concerns.

At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 99.80 after gaining temporary support near 99.60.

On Thursday, the US Challenger report showed that employers laid off 153,074 workers in October. The figure was 183% higher from numbers seen in September and 175% higher than the same month a year ago. The report also showed that laborforce reduction was majorly prompted by the rising adaptation of Artificial Intelligence (AI) and cost-cutting by employers.

Signs of cooling job demand have acted as slight drag on market expectations supporting the Federal Reserve (Fed) to hold interest rates steady in the last meeting of the year in December.

The CME FedWatch tool shows that the probability of the Fed to hold interest rates in the 3.50%-3.75% range in the December meeting has diminished to 33% from 38% seen on Wednesday.

Meanwhile, the Euro (EUR) trades broadly calm against its peers as comments from a number of European Central Bank (ECB) officials have signaled that there is no urgency of monetary policy adjustments.

ECB Vice President Luis de Guindos said in webinar on Thursday that he is comfortable with “current level of interest rates”, and is optimistic on services inflation and growth.