NFP may add to USD strength
The focus today will be on the US labor market data due at 12:30 GMT. According to the forecasts, non-farm payrolls rose by 178K (previous: 162K). The unemployment rate is expected to stay unchanged at 7.4%.
The latest employment data was encouraging. The employment component of the ISM services index jumped to a 6-month high. Weekly initial jobless claims fell more than expected to a seasonally adjusted 323K. ADP employment report showed that US private employers added 176,000 jobs in August, nearly matching expectations.
So, many traders think that the NFP will also come high enough for the Federal Reserve to start tapering QE soon enough – positive factor for USD. According to Reuters, a trader at a Japanese bank said that “unless we see an increase of less than 100K, the USD appreciation trend is unlikely to change”. Barclays also expects US central bank to “start tapering its stimulus unless today’s payrolls report is exceptionally weak.”