Dollar Outlook Sours Ahead of NFP

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Though currently higher, the US Dollar is on track to record its worst single week's performance this year ahead of the release of private sector labor data. The US Labor Department will be releasing its June Non-farms payroll report later today and analysts are forecasting the numbers to be a disappointment, with new private sector jobs at 185,000, a significant drop from May's 263,000. The unemployment rate is expected to be unchanged at 3.2%. If the Non Farm Payrollpredicted numbers are realized, or worse than anticipated, that will set the stage for the Federal Reserve Bank to consider a near-term interest rate cut to stimulate the economy.

As reported at 10:43 am (JST) in Tokyo, the USD/JPY was trading at 108.4700 Yen, up 0.1024%; the pair has ranged from a low of 108.324 Yen to a peak of 108.535 Yen. The EUR/USD was trading at $1.1271, down 0.0379% and off the session low of $1.12708. The GBP/USD was trading at $1.2695, up 0.0094%; the pair ranged from $1.2689 to $1.2700 in the session.

Central Banks Considering Looser Policy

Currently, markets are pricing in the likelihood of a Fed rate cut of 25 basis points by July ending, with another 25 basis points reduction before the end of this year. Analysts say that the trade conflict between the US and China is having a global impact, and that this environment of looser monetary policies from the world's major central banks is only the beginning. Yesterday, the European Central Bank said that it is considering a further postponement of a rate increase until there is more clarity in the Eurozone's outlook.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.