EUR/USD strengthens as mixed US labor data and hopes for a US-Iran deal pressure the Greenback.

The Euro (EUR) strengthens against the US Dollar (USD) on Friday as the Greenback remains under pressure following mixed US labor market data. At the time of writing, EUR/USD is trading around 1.1777, up roughly 0.44% on the day.

Data released by the US Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) increased by 115K in April, beating market expectations of 62K but slowing from March’s 185K gain (revised from 178K). Meanwhile, the Unemployment Rate held steady at 4.3%, in line with market expectations.

Average Hourly Earnings rose 0.2% MoM in April, missing expectations of 0.3% and matching the previous reading. Annual wage growth accelerated to 3.6% from 3.4%, though it remained below the 3.8% forecast.

Taken together, the data is expected to support the Federal Reserve’s cautious approach, reinforcing expectations that policymakers may remain patient before resuming monetary policy easing, particularly as upside risks to inflation have risen amid elevated Oil prices and ongoing tensions in the Middle East.

However, markets remain cautiously optimistic that the US and Iran could eventually reach a deal to end the war, despite fresh reports of clashes between US and Iranian forces near the Strait of Hormuz.

US President Donald Trump downplayed the latest tensions on Thursday, saying the ceasefire remains in place as Washington awaits Iran’s response to the latest US proposal, with Tehran expected to deliver its reply through Pakistani mediators in the coming days.

This cautious optimism is weighing on the Greenback, which has slipped back toward pre-war levels as investors scale back safe-haven demand for the US Dollar. As a result, EUR/USD remains on track to end the week in positive territory for the second consecutive week.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 97.90, down roughly 0.40% on the day.