EUR/USD Plummets as US Dollar Records Best Daily Performance Since September

Key Facts

The US dollar recorded its best daily performance since the September FOMC meeting following the release of robust labor data. ActionForex reported that nonfarm payrolls increased by 165K, causing the EUR/USD pair to plummet from its recent highs. The unemployment rate also fell from 4.2% to 4.1%, providing a significant catalyst for the rally in the US currency.

The labor market strength has shifted market expectations, with CME derivatives now indicating a 76% probability of a rate hike in December 2026. This divergence in monetary policy between the Federal Reserve and the ECB continues to drive price action, supported by US economic exceptionalism. Additionally, the results of the US midterm elections have provided a tailwind for the dollar, despite President Donald Trump previously expressing concerns that a strong greenback could undermine manufacturing competitiveness.