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DXY holds near 99.95 ahead of July jobs data amid Middle East risks
Economists expect 80K new US jobs in July, with unemployment at 4.2% and wage growth at 3.5%, which could shift bets on the Fed and the dollar.
The US Dollar Index, DXY, was trading around 99.95 on Friday, moving little as investors held off on aggressive positioning ahead of the July employment report from the US Bureau of Labor Statistics.
FXStreet said geopolitical tensions in the Middle East continued to support the dollar as a safe haven. It pointed to warnings from a Saudi official about potential attacks involving Iraqi militia factions linked with Iran-backed Houthis, plus Houthi claims over an attack on a Saudi oil tanker, and reports that Iran is considering limiting transit for US and Israeli vessels through the Strait of Hormuz.
The release of Nonfarm Payrolls is expected to be the key near-term catalyst for the dollar, with the outcome likely influencing expectations for the Federal Reserve’s policy path. Economists surveyed by FXStreet expected the economy to have added 80K jobs in July after 57K in June, while the unemployment rate was forecast to stay at 4.2% and annual average hourly earnings growth to remain at 3.5%.
FXStreet also noted that market pricing still includes the possibility of another interest rate hike before year end, and that a stronger-than-expected jobs report could reinforce hawkish expectations. The outlet added that technical signals were neutral, with the one-hour DXY around 99.91, holding above the 99.86 100-period moving average and still capped below the 200-period SMA at 100.30.
Latest closeDollar index 99.98 ▲0.3%