Dollar Extends Loss as Traders Await US Jobs Data
A gauge of the dollar extended its loss in Asia as traders awaited the US non-farm payrolls data to determine the magnitude of the Federal Reserve's interest-rate cut later this month. The yen gained.
The Bloomberg Dollar Spot Index slipped 0.1% while US Treasury yields were steady. The yen was bought for the dollar over the Tokyo fix ahead of non-farm payrolls, according to an Asia-based trader
Economists expect non-farm payrolls to lift by 165k jobs in August and the unemployment rate to edge lower to 4.2%, according to a Bloomberg survey. Whisper numbers among Bloomberg terminal users suggest an addition of just 155k jobs
The report "will be the most important determinant of the size of the FOMC's September rate cut," Commonwealth Bank of Australia strategists Carol Kong and Samara Hammoud wrote in a note to clients.
An in-line number will be dollar positive as it suggests a still-healthy labor market and support a cut of 25 basis points
"Outcomes much worse than the consensus estimates will tip the odds in favor of a 50 basis point cut" and weigh on the dollar
Overnight-indexed swaps are pricing a roughly one-third chance the Fed cuts by 50 basis points at its September meeting, according to swaps data compiled by Bloomberg
USD/JPY fell 0.1% to 143.29
JPMorgan is adding positions to its existing yen longs on the view that Friday's US jobs data will disappoint, paving the way for the Fed to cut the policy interest rate by 50 basis points this month
AUD/USD edged 0.1% lower to 0.6736
EUR/USD little changed at 1.1113
Source : Bloomberg
