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It’s NFP week, yo!

Can labor market numbers turn things around for the Greenback?

Check out the potential catalysts that might affect the dollar’s price action this week! 

Closely watched economic releases

  • ISM manufacturing PMI (Sept 1, 2:00 pm GMT) to accelerate from 50.9 to 53.6 in August
  • Factory orders (Sept 2, 2:00 pm GMT) seen slowing down from 6.2% to 5.4%
  • Trade deficit (Sept 3, 12:30 pm GMT) to widen from $50.7B to $59.0B as imports outpace exports

Non-farm payrolls (Sept 4, 12:30 pm GMT)

  • The economy added a net of 1.76M jobs in July, lower than the 4.8M jump in June
  • The unemployment rate also eased from 11.1% to 10.2%
  • The positive report, along with concerns over the U.S.-China geopolitical tensions and a lack of agreement between Democrats and White House officials over the next stimulus bill boosted USD higher until the week ended
  • Markets see the economy creating another 1.49M jobs in August
  • The unemployment rate could’ve gone down in 9.9% for the month
  • Average hourly earnings to slow down from 0.2% to 0.1%?

Other NFP-related reports

  • ADP report (Sept 2, 12:15 pm GMT) to gain another 1M jobs in August?
  • Challenger job cuts (Sept 3, 11:30 am GMT) seen at 149K (from 263K)
  • ISM’s non-manufacturing PMI (Sept 3, 2:00 pm GMT) to reflect a slowdown (from 58.1 to 56.5)

Overall dollar demand

  • Powell’s show of commitment to low rates last week and the start of a new month could inspire risk-taking in the markets and weigh on the safe-haven dollar
  • PMI reports from around the globe will give hints on the pace of global economic recovery and affect the appetite for the dollar

Technical snapshot

  • The dollar weakened against ALL of its major counterparts in August, with the heaviest losses seen against AUD and CAD
USD Forex Pairs Performance from MarketMilk
USD Forex Pairs Performance from MarketMilk
  • Stochastic considers the dollar “oversold” against NZD, GBP, CAD, and AUD on the daily time frame
USD Forex Pairs Stochastic from MarketMilk
USD Forex Pairs Stochastic from MarketMilk
  • The dollar saw the most volatility against NZD, JPY, AUD, and GBP in the last seven days
USD Forex Pairs Volatility from MarketMilk
USD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read USD’s price recap for August 24 – 28!