FX.co ★ Dollar Pressured Ahead of Monthly Jobs Report

The dollar index declined to approximately 98.1 on Friday, reversing gains from the previous day as investors anticipated the August jobs report, expected to solidify expectations of a Federal Reserve interest rate cut this month. According to the latest ADP survey, private payrolls increased by a mere 54,000 in August, down from July’s adjusted figure of 106,000, and falling short of the projected 65,000. Further data this week indicated continued weakness in the labor market, with job openings decreasing to 7.18 million in July, marking the lowest level since September 2024, while jobless claims rose to a two-month peak. As a result, traders almost fully priced in the likelihood of a 25 basis point reduction on September 17. Several Federal Reserve officials also highlighted risks to the labor market, strengthening calls for prompt policy easing. Consequently, the dollar depreciated widely, with the most significant losses observed against the New Zealand and Australian dollars.