U.S. jobs report expected to push dollar higher


Traders unwilling to sell dollars into U.S. jobs report.

Consensus is for 870 k jobs added in July.

SINGAPORE, Aug 6 - The dollar was supported on Friday in the lead up to the release of U.S. employment data, as markets braced for the numbers that could make the case for faster U.S. policy tightening at a time when action in Europe and Japan remains distant

The euro ended this week dropping about 0.3% on the dollar and was last dwindling below $1.1825. In a few recent attempts it has failed to break resistance around $1.1910 around resistance.

The dollar is also perched at a one-week low of 109.84 Japanese yen, after recovering solidly from the low of 108.72 it touched on Wednesday. The USD index has inched up to 92.316 and is 0.26% higher so far this week.

Fed Vice Chair Richard Clarida's comments this week that conditions for a rate hike could be met in late 2022 have only served to underscore the focus on jobs.

It certainly feels this is a bigger jobs report that has real meaning, said Chris Weston, head of research at broker Pepperstone in Melbourne, both for the economy and rates.

Weston thinks a figure over a million could send the dollar and U.S. yields sharply higher, while a number under 650,000 could rattle nerves even though maybe not the Dollar if it benefits from investors' risk-aversion.

Consensus expectations, from a Reuters survey of 80 economists, are for 870,000 jobs to be added last month, although forecasting hiring amidst a pandemic is a guessing game and estimates range from 350,000 to 1.6 million.

Adding to the murkiness has been a mixed bag of U.S. data throughout the week, with a surprisingly weak ADP report on private hiring but an encouraging dip in jobless claims and the strongest ever reading for services activity.

Data is due at 1230 GMT.

The dollar went marginally higher on the Aussie, sterling and kiwi pair.

Sterling rose overnight after the Bank of England left policy settings as untouched but outlined a path to tapering and tightening over years to come.

The kiwi, the best performing G 10 currency this week, is out for the week and moving above 70 cents of $0.7042 at $0.7042 after strong employment data has investors expecting the Reserve Bank of New Zealand to hike rates the week after next.

The Aussie is rangebound and last at $0.7390, with neither a record trade surplus nor hawkish surprise from the Reserve Bank of Australia enough to give it more than a modest lift.

Also on Friday is the Reserve Bank of Australia (intl. jobs) economic projection due at 0130 GMT and Germany industrial output numbers due around 0600 GMT.