Weak euro area retail data weighs on the euro as markets await US nonfarm payrolls

(1) The euro fell from the previous day's high of 1.1270 against the US dollar to around 1.1165, as risk-off sentiment weighed on the euro, though it ended the week with a modest gain. (2) Eurozone September retail sales fell 0.7% month-on-month, missing expectations; although German industrial output saw a slight improvement, it was insufficient to support the euro. (3) US tech stocks were sold off as markets were concerned about tighter AI industry regulation, leading to safe-haven flows boosting the US dollar. (4) This week, leading indicators of US employment were generally strong: initial jobless claims, ADP, and job vacancies all improved; if the non-farm payrolls continue to perform strongly, it will further benefit the US dollar. (5) Institutions believe the US economy remains resilient and inflation is sticky; the Federal Reserve maintains a tightening path, and the overall environment favors a stronger US dollar.