Nonfarm Payrolls Preview: EUR/USD and GBP/USD to post monthly highs on a bad report
|The US will release July’s Nonfarm-Payrolls report at 12:30 GMT, which is forecast to rise 1.6 million in July down from 4.8 million in June. Dollar is at risk of falling to fresh multi-month lows mainly against high-yielding currencies, just a figure above the 4.8 million grabbed in June could alleviate USD pressure, FXStreet’s Chief Analyst Valeria Bednarik reports.
More – NFP Preview: 10 major banks expectations for July jobs report
Key quotes
“Market’s expectations are that the US has added 1.6 million jobs in July, after adding 4.8 million in the previous month. The unemployment rate is expected to have shrunk from 11.1% to 10.5%, although the participation rate is also seen down, from 61.5% to 61.1%.”
“The greenback is the weakest across the board, and the NFP has little chances of turning the tide. Even a better-than-anticipated report could pass unnoticed in terms of trend. The number to beat that could give the greenback at least a temporal respite is that 4.8 million, the June revision. Such a number could trigger some dollar gains, although it seems unlikely that those could be permanent.”
“A worse-than-anticipated outcome will likely boost the dominant trend, with high-yielding currencies the ones making the most out of it. Fresh monthly highs could be expected on EUR/USD and GBP/USD, while gold also has the chance of reaching new record highs. Commodity-linked currencies such as the AUD may end up ranging, trapped between the dollar’s weakness and softening equities.”
“Canada will also publish its monthly employment report, which means that USD/CAD´s reaction will depend on the imbalances between both countries’ data.”
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