US NFP Preview: Overshadowed by Trump's Tariff Hike
US Labour Report (NFP) and Dollar Price, Chart and Analysis:
- US NFPs still relevant despite interest rate cut, President Trump’s new tariffs.
- Market expectations of 165k new jobs, average hourly earnings tick-up.
The monthly US Labour market release for July is expected to show 165k new jobs created, average hourly earnings ticking up by 0.1% to 3.2% and the unemployment rate steady at 3.7%, according to market expectations. With US unemployment just a fraction above the recent 49-year low of 3.6% and with wage growth ticking up as companies struggle to find workers, the numbers show the US Labour market in robust health. This week’s 0.25% Fed interest rate cut however casts a different economy with fears that growth is slowing against an ongoing background of trade disputes and tariffs. And these fears will have been exacerbated by Thursday’s announcement that the US will put a 10% tariff on $300 billion of Chinese imports from September 1 this year.
If today’s Labour report misses expectations then pressure will build on the Fed to cut rates again at the September meeting, something that will please POTUS. The US dollar is coming off its recent 27-month high but with other major currencies, especially EUR and GBP being structurally weak, the US dollar may not fall as much as US President Trump wants.
US Dollar Daily Chart (January– August 2, 2019)
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