Here is what you need to know on Friday, September 3:
The dollar has been stuck at the lows in typical pre-Nonfarm Payrolls tension. An increase of 750,000 jobs is expected but the whisper number is lower after weak data. Japan's PM Suga announced his resignation, boosting Japanese shares. Ethereum leads the charge among cryptos.
Greenback losing ground: In what seems like an extended response to Wednesday's weak data, the dollar extended its falls on Thursday, dismissing somewhat better-than-expected weekly jobless claims. Early on Friday, pre-Nonfarm Payrolls are keeping currencies range bound in a typical calm before the storm.
NFP: The economic calendar is pointing to an increase of 750,000 jobs in August after adding 943,000 in July, yet weak ADP jobs figures and a downbeat employment component in the ISM Manufacturing Purchasing Managers' Index probably downgraded expectations. Average Earnings are set to remain at 4% YoY.
The publication is critical to the Federal Reserve's decision about tapering its $120 billion/month program in its upcoming meeting after Chair Jerome Powell refrained from committing to such a move. See:
- NFP Preview: How low can the dollar go? Extremely low expectations point to a greenback comeback
- US August Nonfarm Payrolls Preview: Analyzing major pairs' reaction to NFP surprises
- Nonfarm Payrolls August Preview: Sine qua non for the taper
Change at the top: Japanese Prime Minister Yoshihide Suga announced he would step down after barely one year at the job. Suga was criticized for handling the covid crisis and faced a tough leadership contest within the ruling LDP. Japanese stocks reacted positively, jumping by some 2%, but USD/JPY remained stable at around 110 ahead of the NFP.
EUR/USD is trading well above 1.1850 in response to dollar weakness and some hawkish comments from hawkish European Central Bank members. The ECB could withdraw some stimulus following robust inflation figures. Markit's final Services PMIs are eyed.
GBP/USD has finally broken above 1.38 amid talk of a UK tax hike. Final Services PMI is eyed. AUD/USD is clinging to 0.74, shrugging off downbeat Australian retail sales and a sharp drop in China's Caixin Services PMI.
Cryptocurrencies: Ethereum continues leading the charge among the largest digital assets, topping $3,800 while Bitcoin retreats from $50,000. ADA/USD is hovering below $3.
Gold is hovering around $1,810, seemingly also awaiting the NFP verdict while WTI Crude Oil has been extending its gains, changing hands near $70 and dismissing the OPEC+ decision to continue with restoring production.