The official employment report for the United States is due on Friday. Payrolls are expected to rise by 690.000 people, according to market estimates. According to TD Securities analysts, the US dollar will require a strong report to increase further from its present position, as some upside expectations have already been factored in.
“Payrolls are likely to have increased again, with the rate rising from +559k in May. The Homebase data points to some acceleration in the private sector, while government payrolls are likely to have benefited from fewer than usual end-of-school-year layoffs. Our prediction assumes a 6.8 million net decrease in payrolls from pre-COVID levels; more strengthening will be required to meet the Fed’s “substantial further progress” tapering criteria.”
“If our base case for the June employment report comes true, we believe the USD will revert to consolidation mode against most G10 counterparts. Although our estimate of +800K is greater than the current analyst average, we believe FX markets will accept it because some upside hopes have already been priced in. We believe the USD would need a particularly strong reading to find sustained upside from present levels after a big run higher.”/n
