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EUR/USD retreats to 1.1430 as the impulse from a hawkish ECB ebbs.

June 6, 2025

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The Euro hit a nearly two-month high at 1.1495 following the ECB’s decision.
ECB President Lagarde shocked investors with an unusually hawkish message.
Investors are focusing on the US Nonfarm Payrolls data on Friday.

EUR/USD is trading moderately lower on Friday, moving near the 1.1430 level at the time of writing, after having reached levels near 1.1500 the previous day. A hawkish European Central Bank (ECB) statement boosted the common currency on Thursday, but the market is turning more cautious while awaiting the US Nonfarm Payrolls (NFP) report due later.

The ECB cut interest rates by 25 basis points, lowering the key Rate On Deposit Facility to 2.0% as widely expected after Thursday’s monetary policy meeting. Still, President Christine Lagarde struck an exceptionally hawkish tone, suggesting that the easing cycle might be nearly over.

Investors pared back hopes of further ECB monetary easing for the coming months, and the Euro (EUR) rallied alongside the German Treasury bond’s appreciation.

The US Dollar (USD), on the contrary, remained on its back foot, weighed by a string of downbeat macroeconomic releases this week and the lack of progress in US President Donald Trump’s negotiations with trading partners.

The long-awaited phone call between Trump and Chinese President Xi Jinping has failed to bring any advance on the uncertain trade relationship between the world’s two major economies, but the positive comments from the republican have contributed to soothing investors.