The euro hovered near $1.165, its weakest level since December 9, as investors digested a heavy slate of economic data and reassessed the monetary policy outlook for 2026.
In the US, the latest jobs report delivered mixed signals.
Nonfarm payrolls rose by just 50,000 in December, undershooting expectations of 60,000, while the unemployment rate fell to 4.4%, below forecasts.
Overall, the data point to a still-resilient labor market, reinforcing expectations that the Federal Reserve is unlikely to cut interest rates in the near term.
By contrast, easing inflation pressures in the euro area have weighed on prospects for tighter policy from the European Central Bank.
Eurostat data showed headline inflation slowing to 2.0% in December, a four-month low and back at the ECB’s target, while core inflation eased to 2.3%, slightly below expectations.