Euro rebounds above 1.1250 after weak US jobs data weighs on US Dollar

The Euro rebounded above 1.1250 on Friday following weak US job data that put pressure on the US Dollar. The EUR/USD pair rose 0.16% to 1.1260, after hitting a low of 1.1221 earlier in the day. The weaker-than-expected US employment figures, with Nonfarm Payrolls only increasing by 29K in September, below market expectations of 90K, contributed to the dollar's decline.

Additionally, revisions to previous months showed further signs of weakness in the labor market, with August's increase down to 133K from 162K, and July's growth revised from a 21K increase to a decline of 10K. The US Unemployment Rate rose to 4.2%, while the Labor Force Participation Rate increased to 61.8%. The US Dollar Index also fell 0.23% to 101.80.

The revised employment figures lowered the odds of a Federal Reserve interest rate hike in October to 17%, down from 24% before the NFP release and 64% a week earlier. The Euro faced domestic headwinds despite the recovery, with Eurozone inflation accelerating to 3.8% YoY in September, above expectations of 3.6%. Core inflation also edged up to 2.5%. These factors could pressure the European Central Bank to maintain a restrictive monetary stance.