Dollar steady as traders brace for deluge of jobs data By Reuters

By Ankur Banerjee

SINGAPORE (Reuters) – The dollar held close to two-week highs against the yen and euro on Tuesday as investors braced for a raft of economic data, including Friday’s U.S. payrolls report, that will influence the size of the cut expected interest rate. from the Federal Reserve.

The euro was last at $1.1060, not far from the two-week low of $1.1042 it hit in the previous session, while the yen hit 147.10 per dollar in early trade, close to its highest two-week low of 147.16 reached on Monday.

Investors this week will focus squarely on US payrolls data due on Friday after Fed Chairman Jerome Powell last month endorsed an imminent start to interest rate cuts in a sign of signs of concerns about the labor market.

Before that, Wednesday’s job openings data along with Thursday’s jobless claims report will be in focus.

Markets have a 69 percent chance of a 25 basis point (bps) cut when the Fed meets Sept. 17-18, with a 31 percent chance of a 50 basis point cut, CME’s FedWatch tool showed .

This week’s glut of labor data will be crucial to ending the debate between a 25 or 50 basis point cut in September, said Charu Chanana, head of currency strategy at Saxo.

“If the data remains solid, a 25 bps cut is more likely. However, a weak nonfarm payrolls cut, especially if it falls below 130k with another higher jump in the unemployment rate, could push the rate market closer to pricing in a 50bps cut. “

Economists polled by Reuters expected 165,000 U.S. jobs to be added in August, up from an increase of 114,000 the previous month.

which measures the U.S. currency against six rivals, was at 101.69 in early trade, just below the two-week high of 101.79 it hit on Monday. The index fell 2.2 percent in August on expectations of a U.S. interest rate cut.

Sterling fell slightly to $1.31425 in early trade. The Australian dollar was down 0.14% at $0.6782, while the New Zealand dollar was down 0.18% at $0.6223.