Looming NFP Weighs on Greenback
The US Dollar continues to be under some pressure and remained just above a 2½ year trough versus the common currency Euro as investors prepare themselves for Friday’s release of US private sector jobs data. The US Dollar Index, used by investors to gauge the greenback’s relative strength, had fallen to a 14-month low on Wednesday. FX strategists believe that the non-farms payroll report will need to be substantially upbeat in order to minimize a bearish trend. Without an upbeat report, it is expected that the greenback’s slide will continue. Analysts are currently forecasting 183,000 new jobs added in July, well off June’s 222,000.
As reported at 11:51 am (BST) in London, the EUR/USD is trading at $1.1837, down 0.17%; the pair had earlier hit a high of $1.18621, while the session trough stands at $1.18298. The GBP/USD is trading at $1.3243, a gain of 0.08%, off the session peak of $1.32693 while the session low is at $1.32078. The USD/JPY is currently down 0.07% to trade at 110.641 Yen; the pair’s daily range is from a low of 110.557 Yen to a peak of 110.838 Yen.
Fed Future Policy a Concern
FX traders are worried that a disappointing report from the US Labor Department could throw a monkey wrench into the Federal Reserve’s monetary policy decision, especially as it relates to the now diminished likelihood of a rate hike later this year. The latest indications show that markets predict that likelihood at 35%. The US Dollar could get a lift, albeit perhaps only a brief one, from today’s release of PMI data and factory orders.