Friday's US July jobs report is the last major data point of the week for the dollar, with Danske Bank forecasting nonfarm payrolls at +70,000 and unemployment holding at 4.2%. The dollar edged higher against most G10 currencies as oil prices rose, while Fed Chair Warsh is sticking to his no-guidance policy on rates.
The US July jobs report caps the week's data calendar Friday afternoon, and Danske Bank forecasts nonfarm payrolls at +70,000, unemployment unchanged at 4.2% and average hourly earnings up 0.3% m/m seasonally adjusted. Most leading data still point toward solid labor market conditions, though weak labor supply growth also weighs on the employment outlook.
Higher oil prices support the dollar
EUR/USD edged lower but stayed within the 1.1500-1.1550 range, while USD/JPY moved above 158, as higher oil and natural gas prices supported the dollar broadly against most G10 currencies.
Brent crude ended the day just below $84 a barrel after reports that Iran struck what it described as hostile targets in the Strait of Hormuz, and a draft Iran-Oman proposal would impose tighter shipping controls than markets had anticipated. Treasury and Bund yields moved higher, particularly in the belly of the curve.
Fed's Warsh sticks to no-guidance policy
Attention also turned to Fed communication, with the FT reporting that Chair Warsh will stick to his no-guidance policy. People familiar with his thinking said he would be prepared to raise interest rates at the September meeting if upcoming inflation prints remain elevated and markets price in higher borrowing costs. Warsh is expected to explain the framework behind his communication approach at Jackson Hole on August 22.
Meanwhile, the July Challenger Report showed 33,429 announced layoffs, the lowest level since July 2024, though the share of AI-linked layoffs continued to rise and now accounts for up to 33% of the total. Continuing jobless claims rose to 1.801 million in the week ending July 25. Productivity growth picked up to 1.4% q/q annualized in Q2 from 0.3% in Q1, limiting unit labor cost growth to 1.3% q/q annualized from 1.8%.
The Fed's Barkin, a non-voter, will be on the wires after the jobs report's release.
Source: ActionForex
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