The U.S. Dollar is just beginning to gain some positive momentum in the trading week. Earlier, it had been broadly after Friday’s U.S. employment costs report seems to have clouded the outlook for the Federal Reserve Bank. One index which reflects employment costs (salaries, benefits, etc.) edged just 0.2% higher in the 2nd quarter, the smallest rise in 30 years. Given that disappointment, investors are certain to turn their focus to this week’s release of economic data, including consumer spending reports which will be released later today. With the US consumer the main driver of US growth, that will be very important for the Fed to use as a gauge for the timing of a rate increase.
As reported at 11:34 am (BDT) in London, the EUR/USD was trading at $1.0960, just a pip from the session low of $1.0959 while today’s high was $1.0996. The USD/JPY was trading at 124.1780 Yen, a gain of 0.23%. The AUD/USD was lower at $0.2787, down 0.34%. Earlier the US Dollar Index had been down 0.15% to trade at 97.215 .DXY, before recovering to 97.400 .DXY, a slight gain of 0.07%.
NFP to be Fed’s Key Focus
The real gauge for the Fed, of course, will be this Friday’s release of the private sector, non-government jobs report for the month of July (the non-farms payroll report). Ahead of that, the ADP jobs report will perhaps offer clues to the NFP outcome, as analysts generally see movement in tandem between the two reports. Besides new jobs, data on the unemployment rate, participation rate (number of eligible workers that actually work), and average earnings, will all help mold Fed monetary policy.