Dollar falls to one-week low as payrolls test looms Reuters

By Kevin Buckland

TOKYO (Reuters) – The U.S. dollar fell near a one-week low against major peers on Friday, with labor market indicators sending mixed signals ahead of crucial monthly wages data later in the day that is almost certain to set the pace for easing the Federal Reserve’s policy. .

which rates the currency against a basket of six key peers, was steady at 101.03 at 0015 GMT after falling about 0.2 percent overnight to hit 100.96 for the first time since Aug. 29. For the week, it fell nearly 0.7%.

A report on Thursday showed that the number of Americans filing new claims for unemployment benefits fell last week as layoffs remained low. That helped ease fears that the labor market was deteriorating rapidly after figures released the previous day showed private sector job growth fell to a 3½-year low in August.

Mixed data leaves traders guessing ahead of Friday’s print payrolls, with economists polled by Reuters forecasting an increase of 165,000 jobs in August, compared with an increase of 114,000 in July.

What the Fed does about the numbers will be almost immediately apparent, with both Governor Christopher Waller and New York Fed President John Williams taking the podium separately in the final Fedspeak address before the start of the lock-in period ahead of the policy meeting from this month.

Traders currently see odds of a 50-basis-point (bps) Fed rate cut on Sept. 18 at 40%, compared to a 60% chance of a quarter-point cut, according to CME Group’s (NASDAQ :). A day earlier, bets on the bigger discount were 44%, but a week ago they were 34%.

Fed Chairman Jerome Powell signaled that the central bank’s focus was shifting from fighting inflation to preventing labor market deterioration when he strongly advocated an imminent start to the monetary easing cycle at the annual economic conference in Jackson Hole last month.

“Recent labor data has fueled fears that the labor market is weakening (and) the August payrolls report could be a ‘fake or break’ moment,” wrote TD Securities analysts, including chief of global strategy Rich Kelly, in a report.

However, TD expects 205,000 jobs to be added in August, setting a quarter-point cut this month and sparking a rebound in the dollar.

“There is simply a lot of bad news on the USD price, increasing the risks that a burst of good news could trigger a sizeable correction.”

The dollar held steady at 143.25 yen after falling overnight to 142.855 for the first time since Aug. 5, pressured by a drop in U.S. Treasury yields, with the 10-year note falling to a one-month low of 3.721% .

The euro held steady at $1.1112, just below Thursday’s one-week high of $1.11195.

Sterling was little changed at $1.31755, remaining close to the overnight peak at $1.31855, the strongest level since August 30.

The risk-sensitive Australian dollar eased slightly to $0.6739.

Bitcoin, the cryptocurrency leader, rose 0.2 percent to $56,167, trying to recover from a near one-month low of $55,575.78 this week.