The highly anticipated Nonfarm Payrolls (NFP) data for August will be released by the United States Bureau of Labor Statistics (BLS) on Friday at 12:30 GMT, with expectations of a 160,000 job increase following July’s 114,000 gain.
This employment data is crucial for determining the size of the expected interest-rate cut by the US Federal Reserve (Fed) in September, which will have a significant impact on the US Dollar (USD) and financial markets.
What to Expect in the Next Nonfarm Payrolls Report?
The upcoming NFP report is projected to show job growth of 160,000 in August, with the Unemployment Rate expected to drop to 4.2% and Average Hourly Earnings to increase by 3.7% year-over-year.
This data will provide valuable insights into the strength of the US labor market, influencing the Fed’s interest-rate outlook at their September meeting and beyond.
How Will US August Nonfarm Payrolls Affect EUR/USD?
The USD has been weakening against major currencies, including the Euro (EUR), as market expectations of a Fed rate cut grow. The upcoming NFP report will either confirm or challenge these expectations, impacting the EUR/USD pair.
Recent economic indicators, such as the ISM Purchasing Managers Index and ADP employment data, have raised concerns about the US economy, leading to increased bets on a 50 bps rate cut by the Fed in September.
Depending on the NFP results, the USD could face further pressure if job growth falls below expectations, leading to a potential 50 bps rate cut. Conversely, a strong NFP report could reduce the chances of a large rate cut, supporting the USD against the Euro.
Overall, the NFP report will provide valuable insights into the US labor market and its impact on Fed policy decisions, which will influence currency markets and investor sentiment.