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U.S. job growth miss expectations in February
U.S. unemployment edges higher, Trump granted temporary tariff exemptions, and the euro surged on German fiscal reforms and ECB policy signals.
U.S. added 151K jobs in February, missing forecasts.
Unemployment rate rose to 4.1%.
Trump granted temporary tariff exemptions for Canada and Mexico.
Markets remained cautious over trade policy uncertainty.
US Unemployment edges higher
The U.S. economy added 151,000 jobs in February, falling short of market forecasts of 160,000 but exceeding the downwardly revised 125,000 in January. Gains were recorded in healthcare, financial activities, transportation and warehousing, and social assistance, while federal government employment declined.
Meanwhile, the unemployment rate rose to 4.1%, reflecting signs of a cooling labor market. The data reinforces expectations that the Federal Reserve may maintain a cautious approach to monetary policy, as policymakers assess the broader economic impact of slowing job growth.
Trump grants temporary tariff exemptions for Canada, Mexico
Overnight, U.S. President Donald Trump approved temporary tariff exemptions for Canadian and Mexican goods under the USMCA, postponing full implementation until April 2. The move provided some relief to the Canadian dollar, but broader market sentiment remained fragile, with Wall Street ending the session lower. The Nasdaq led losses among major indexes.
The exemptions cover approximately 50% of Mexican imports and 38% of Canadian imports. However, Trump’s decision failed to reassure investors, as concerns persist over the administration’s unpredictable trade policy. Markets remain wary of the president’s inconsistent messaging—alternating between strict tariff enforcement and exemptions—leaving traders uncertain about future policy direction.
Euro heads for best weekly gain in 16 years
The euro surged above $1.085 on Friday, reaching its highest level since November 5 and tracking a 4.6% weekly gain—its strongest performance since March 2009. The rally was driven by Germany’s fiscal reforms, a more cautious tone from the European Central Bank (ECB) on interest rate cuts, and a weakening dollar amid trade tensions linked to U.S. policy.
Germany’s ruling coalition announced plans to overhaul the country’s debt brake, paving the way for increased defense spending and a €500 billion infrastructure package aimed at supporting economic growth. European leaders also agreed to expand military spending to bolster the continent’s defense industry.
On the monetary policy front, the ECB delivered a widely expected 25-basis-point rate cut but signaled a less aggressive approach to further easing, suggesting a potential pause. Traders now anticipate one or two additional rate cuts of the same magnitude later this year.
