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US July nonfarm payrolls set to test September Fed rate hike bets

Ahead of Friday’s 12:30 GMT release, forecasts call for 80K new jobs, a steady 4.2% unemployment rate, and 3.5% annual wage inflation.

Reported · Written up by our desk · Major Pairs

FXStreet highlights that the US Bureau of Labor Statistics is due to release July nonfarm payrolls on Friday at 12:30 GMT, a data point traders typically view as among the most important for currency markets. The setup comes as investors have scaled back expectations for a September Federal Reserve rate hike, driven by easing inflation fears. However, the employment report’s underlying details could shift market pricing for the Fed’s policy path and move the US dollar, according to FXStreet.

Market expectations center on nonfarm payrolls rising by 80K after June’s 57K print, with the unemployment rate expected to remain at 4.2%. Annual wage inflation, measured by the change in average hourly earnings, is projected at 3.5%, FXStreet adds.

FXStreet also notes the payroll number can be volatile and subject to revisions, meaning the reaction in the forex market depends on how traders interpret the full BLS report rather than the headline figure alone. It further points to Fed attention on inflation and labor market conditions, citing recent remarks from Philadelphia Fed President Anna Paulson and Kansas City Fed President Jeff Schmid.

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