Investing.com – The US dollar fell slightly on Thursday ahead of the release of more vital labor market data, while the euro rose slightly despite political turmoil in France.

At 05:20 ET (10:20 GMT), the Dollar Index, which tracks the dollar against a basket of six other currencies, was trading 0.1% lower at 106,180.

The dollar gives back part of the profits

The dollar gave up some of its recent gains following slower-than-expected monthly growth, while services sector activity fell in November after posting gains in recent months.

Federal Reserve Chairman Jerome Powell indicated that the U.S. economy is now stronger than the central bank expected in September when it began cutting interest rates, suggesting a slower pace of rate cuts in the future.

The market still expects a rate cut in December, but weekly data later in the session and, more importantly, on Friday may facilitate set expectations for future rate movements.

“Weekly jobless claims have remained very low lately, but tomorrow’s NFP employment data will have a much greater impact on the dollar’s further development,” ING analysts said in a note.

The euro is rebounding despite the French political crisis

In Europe, the rate rose 0.2% to 1.0532, away from a two-year low of 1.0331 at the end of November, even though French Prime Minister Michel Barnier was expected to resign after losing a no-confidence vote on Wednesday.

This may result in a delay in the introduction of fiscal restrictions in the eurozone’s second-largest economy, but at some point the country’s huge budget deficit will need to be addressed.

At the same time, data released earlier on Thursday showed Germany contracted 1.5% in October, although it also fell on a monthly basis, suggesting frail growth going forward.

Interest rates are widely expected to be cut next week, with the market pricing in rate cuts of more than 150 basis points by the end of 2025.

“We continue to believe that near-term resistance at 1.0550 could be the extent of the EUR/USD recovery and we see a case where EUR/USD hovers around 1.0500 in the coming days,” ING said, “given that it appears that it remains over The $5 billion FX option at 1.0500 strikes at this level and expires in the coming week.”

traded 0.2% higher at 1.2721, helped by stronger-than-expected UK growth in November.

Another winning retreat

In Asia, it fell 0.2% to 150.25, fell 0.1% to 7.2709 and gained 0.2% to 0.6440.

rose 0.5% to 1,417.55 after the pair hit a two-year high on Wednesday after South Korean President Yoon Suk-Yeol abruptly canceled martial law amid public and political anger.

South Korea’s Ministry of Finance announced the establishment of a market stabilization fund worth 40 trillion won ($28.35 billion). The Bank of Korea may buy bonds and expand repo operations, and authorities will be ready to act on contingency plans if necessary.