Today, employment data for both the United States and Canada will be released. The highly anticipated US non-farm payrolls are expected to increase by around 200,000 jobs, which is similar to the previous increase of 209,000 jobs. However, employment figures are often subject to surprises, so it’s best to wait for the actual results before making any judgments. The unemployment rate is forecasted to be at 3.6%, on par with the previous reading. As for wages, the average hourly earnings growth is expected to be +0.3% month-on-month and +4.2% year-on-year, showing a slight slowdown from the previous data.
Although there has been upward pressure on the dollar throughout the week, buying momentum has slowed down ahead of the US employment data and the upcoming weekend. On August 10, the July US Consumer Price Index will be released, and there’s an expectation of inflation deceleration. Depending on the outcome of the US employment data, there is a possibility that the dollar will continue to adjust higher.
With the recent downgrade of the US credit rating by Fitch, headwinds are blowing in the stock market, and profit-taking selling has emerged in various global stock markets that were previously rising. August is often associated with market corrections. While Amazon’s positive earnings report is seen as a bright spot, whether the market can shrug off the pressure for adjustment towards the weekend remains to be seen. If the correction mood persists, it may weigh on the upside of USD/JPY.
Later on the foreign markets, the following economic indicators will be released: Eurozone Retail Sales (June), US Employment Data (July), Canadian Employment Data (July), and Canadian Ivey Purchasing Managers Index (July). Regarding Canadian employment data, the unemployment rate is expected to rise slightly to 5.5% from the previous reading of 5.4%. Employment is projected to increase by 25,000 jobs, not as high as the previous 59,900 jobs, but still indicating a continued increase.
we will await the results of the US employment data and the unemployment rate. We’ll keep an eye on the market’s direction after this release.