The first Friday of each month is usually the NFP day. US labor data could be crucial for FED’s policy that seems to be the last chance that can help the dollar. Trump’s policy is in doubt so central bank’s decisions are crucial for the currency. That is why the market will be fully focused on the NFP in upcoming hours.
1:30 pm – US – NFP report – The first and the most important print of the day. The US dollar is looking for some good news as it seeks to snap a pretty poor run of things. The dollar index has skidded to its weakest since January 2015 on political instability and longer odds for another Fed rate hike this year. A very crowded short dollar trade, with positioning at its most bearish in eight years, creates the environment for a sharp reversal but we’d likely need to see something really impressive from the NFP to spark the short squeeze. Not only the headline number should impress, but also wages. The market expects a lower, but healthy rise in employment (180k) and wages at 2.4% YoY. A beat in both could help the dollar, while lower numbers (especially in wages) could but the EURUSD even towards 1.20
1:30 – Canada – Employment report – Canadian employment growth, which has been on a torrid pace with about 100,000 jobs added over May and June, is expected to show a pronounced slowdown when figures for July are released Friday. Following job gains of 55,000 in May and 45,000 in June, many economists are now projecting smaller gains, with some even forecasting a reduction in employment. The consensus forecast is for the addition of 19,000 jobs. The CAD was one of the strongest currencies recently with some significant changes in positioning, so a lower number could spur a rebound on pairs with CAD.
6:00 – US – Baker Hughes Rig Count – Crude prices were quoted weaker in Asia on Thursday with rig count figures by Baker Hughes at the end of the week to set the tone. The upward trend in rigs could herald a rise in the shale production which could undermine OPEC’s deal. That is why each rise in active rigs could be a bearish sign for oil.