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August payrolls set for spotlight as markets weigh dollar and policy signals
The market expects unemployment to stay at 4.1% and average hourly earnings growth to cool to 3.0% year over year, with US 2-year yields around 4.3%.
Markets are looking ahead to the August non-farm payroll report, with consensus calling for job growth of about 56,000, after July’s decline of about 23,000 and June’s increase of about 63,000, according to Forexlive. The unemployment rate is forecast to remain at 4.1%, unchanged from the prior reading, while average hourly earnings growth is expected to ease to 3.0% year over year from 3.2% previously. Forexlive also noted that August can be difficult to read because school start times can distort seasonal adjustments, leading traders to focus on the underlying trend rather than educational hiring.
Forexlive said a softer jobs report would likely add pressure to the US dollar, which it described as already weak after “surprisingly dovish” comments from Fed Governor Chris Waller earlier in the week. The outlet also flagged turbulence in USD/JPY, which it linked to intervention speculation and described as having dropped by 330 pips on the day.
On policy expectations, Waller downplayed the likelihood that employment data would materially differ from what has been seen and emphasized that his decision would be driven more by incoming August inflation information. Forexlive added that US 2-year yields were around 4.33% and that markets were roughly evenly split on whether the Fed would hike in September.
Latest closeUSD/JPY 158.82 ▼0.9%