FXStreet (Łódź)- The eFXnews team point out that Credit Agricole sees a series of major risk events for the USD, the most important one being the NFP report release on Friday.
“High frequency data, such as the initial jobless claims, paints a picture of a strong labor market, which is also confirmed by some of the monthly survey measures as well.”
“As such, payrolls are likely to remain close to the recent trend, with the market expecting a rise of 231k.”
“The key detail to keep your eye on is the change in wage growth (average hourly earnings). Here, the market expects a flat read for July but the annualized rate is seen rising 2.2% YoY.”
“Given base effects a rise above 2.2% will be needed to keep the market excited.”
“While we do not expect a sustainable rally in USD to take hold yet, tightening labor market conditions are likely to translate into higher inflation in time.”
“What’s more, we also think technical pressures and positioning adjustments will limit a potential breakout in the USD for now.”
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