NONFARM PAYROLLS FRIDAY
US nonfarm payrolls, the most closely watched data release of the month, will be released today. Another solid month of jobs creation could be a boon to the US dollar as traders double down on multiple interest rate hikes by the Federal Reserve later this year.
Action begins at 07:15 GMT with a spate of European PMI reports covering Spain, Switzerland, Italy, France, Germany and the 19-member Eurozone. The Eurozone Composite PMI, which tracks business conditions in the manufacturing and services sectors, is forecast to come in at 54.4.
The European Commission’s statistical agency will report on retail sales a 09:00 GMT. Receipts at retail stores are forecast to rise 0.4% in June after flatlining the month before. In annual terms, this translates into a gain of 1.4%.
The US Labor Department will report on nonfarm payrolls at 12:30 GMT. US employers likely added 190,000 workers to payrolls last month, following a net gain of 213,000 in June. The unemployment rate is projected to fall to 3.9% from 4% even as workforce participation increases.
Average hourly earnings – a key proxy for wage inflation – are projected to rise 0.3% on month and 2.7% year-over-year.
Earlier in the week, payrolls processor ADP Inc. said private-sector payrolls increased by 219,000 in July compared with 181,000 the month before.
Separately, the Department of Commerce will release the latest trade figures at 12:30 GMT. Washington’s deficit with the rest of the world likely rose to $46.5 billion in June from $43.1 billion the month before.
Later in the session, the Institute for Supply Management (ISM) will release its monthly gauge of services activity. The ISM non-manufacturing PMI is projected to come in at 58.6 in July compared with 59.1 the month before.
Europe’s common currency has been on a downward spiral for most of the week, with prices falling back below 1.1600 US. At the time of writing, EUR/USD was trading at 1.1582, where it was little changed compared with the previous close. Immediate support is located at 1.1600. On the flipside, resistance is likely found at 1.1635.
The Australian dollar was little changed on Friday after China, its largest trading partner, reported a slowdown in service-sector activity. AUD/USD is currently trading around 0.7363. The pair peaked near 0.7450 earlier in the week. In terms of technical levels, the pair faces immediate support near 0.7310, which corresponds with the year-to-date low.
The USD/JPY exchange rate is showing signs of strength this week, as the bulls continue to target the 112.00 level. The pair peaked at 112.14 on Wednesday but has since fallen back down to around 111.74. Immediate support is located in the 111.25 region, followed by 111.00. On the opposite side of the spectrum, immediate resistance is located at 112.55.