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US nonfarm payrolls preview points to dollar, EUR/USD swings

Markets expect July nonfarm payrolls to rise by 80K, with the unemployment rate seen steady at 4.2% and average hourly earnings inflation at 3.5%.

Reported · Written up by our desk · Major Pairs

FXStreet said the US Bureau of Labor Statistics will release July nonfarm payrolls on Friday at 12:30 GMT, and traders are looking for fresh signals on the Fed’s interest rate path and the dollar’s valuation.

The preview notes investors have been scaling back expectations for a September rate hike on easing inflation concerns after June’s payroll print of 57K. Consensus calls for July nonfarm payrolls to increase by 80K, the unemployment rate to remain at 4.2%, and annual wage inflation, measured by average hourly earnings, to stay at 3.5%.

FXStreet added that CME Group’s FedWatch tool has put the probability of a 25 basis point September hike at 55%, down from about 70% late July. A major downside surprise, defined in the piece as a payroll print below 40K, could prompt the Fed to move more slowly, pressuring the USD and helping EUR/USD gain.

The newsletter also said Fed policymakers remain focused on inflation while seeing little cooling in the labor market, citing comments from Philadelphia Fed President Anna Paulson and Kansas City Fed President Jeff Schmid about the need for continued action if inflation progress stalls.

Latest closeEUR/USD 1.152 ▼0.3%

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