The dollar was broadly weaker on Thursday as markets braced for this afternoon’s all-important US payrolls report. Economic news in the lead up to today’s report has been largely disappointing, which can perhaps partly explain the pullback in the dollar.
The November services PMI from ISM (52.1 vs. 55.5 expected), ADP employment change number (146k vs. 150k) and the weekly jobless claims print (224k vs. 215k) all came in weaker than consensus.
While this strong of softer data far from guarantees a weaker NFP print today, it equally does not bode particularly well either. The October data appeared heavily distorted by the hurricanes in the south, so a rebound in job creation looks on the cards. It will be the extent of the rebound, however, that inventors will be interested in.
Consensus is for a headline NFP number around the 200k mark, but with unemployment set to increase and wages slow, any sort of miss here could be enough to force the Federal Reserve into cutting rates again later this month, which would be bearish for the greenback - futures currently see around a 70% of a 25bp rate reduction.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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