The main event today is the U.S. employment report which is expected to drive the market. The Bank of England, yesterday, left monetary policy unchanged at 0.25% and drove the sterling sharply lower. The euro posted another positive week.
Non-Farm Payrolls Report the Key Event of the Day
The U.S. employment report will be the highlight of the day. The U.S. economy is forecasted to have added 187K jobs in July versus 222K jobs in June. The jobless rate is predicted to decline to 4.3% against 4.4% before, while the average hourly earnings for July are forecasted to have risen by 0.3% month-over-month, from an increase of 0.2% the month before. The U.S. dollar is expected to have a bearish movement; however, if wage growth and the unemployment rate improve we are waiting for a stronger greenback. Traders should be cautious with their positions as the market may be volatile.
On Wednesday, the ADP employment change announcement did not help the case for stronger non-farm payrolls report and more importantly a Federal Reserve rate hike as the market failed to meet market expectations, as it dropped to 179K for July from 190K the previous month. Moreover, yesterday, the weekly jobless claims released, as well as the Markit services PMI, and the ISM non-manufacturing PMI which edged lower to 53.9 in July from 57.4 before. Factory orders rose by 3.0% in June against a decline of 0.3% the previous month.
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