US dollar weakens as markets await August jobs report
The dollar came under pressure ahead of forecast payroll data, while the euro and sterling recovered amid shifting central-bank rate expectations.
The US dollar weakened ahead of the August non-farm payrolls report, with markets weighing how the data could influence expectations for Federal Reserve policy. Payrolls were forecast to increase by about 56,000, while unemployment was expected to remain at 4.1%.
Yahoo Finance, citing market commentary originally published by FX Empire, described the DXY outlook as neutral to bearish after the index broke below 99.08. The 98.83 level was identified as the next key point, although the dollar’s technical outlook could change if the index moves back above resistance levels.
Federal Reserve Governor Christopher Waller reportedly said signs of disinflation could support holding monetary policy at the September meeting. The source said weaker jobs and wage figures could encourage a pause, while stronger data could revive expectations for tighter policy.
The euro recovered, with EUR/USD trading near 1.1629 after breaking above a descending trendline. The 1.1625 area, previously identified as resistance, was described as new support. The source also cited a Reuters poll of 65 economists showing unanimous expectations for the European Central Bank to raise its deposit rate by 25 basis points to 2.50% on 10 September.
Sterling was trading near 1.3542 after rebounding from the 1.3477 support zone. Expectations for future Bank of England rate rises were described as more aggressive, amid concerns that higher energy prices could keep inflation elevated. Rising UK government-bond yields were also cited as a factor for the government’s October budget.
