MW: Dollar rises against yen as investors bet on strong jobs report
The dollar traded higher against most of its industrialized rivals, except the euro and the Norwegian krone, ahead of Thursday’s June jobs report.
The ICE U.S. Dollar Index DXY, -0.19% was down 0.1% to 96.2420, largely a factor of the euro strengthening 0.3% to $1.1074. The index measures the dollar’s strength against six rival currencies, with the euro the most heavily weighted among them.
The euro EURUSD, +0.3347% traded at $1.1041 late Wednesday in New York. But the dollar USDJPY, -0.08% strengthened to 123.52 yen, adding to its gains against the Japanese currency from Wednesday’s session. The dollar traded at ¥123.24 late Wednesday in New York.
Forecasts for the reading on nonfarm payrolls rose following Wednesday’s unexpectedly strong ADP jobs report. The widely watched report has underestimated the Labor Department’s official number in five of the last seven months.
The consensus forecast from a survey of economists conducted by MarketWatch is 225,000. But the median of forecasts made Tuesday and Wednesday is 255,000, said Steve Englander, global head of G10 FX strategy at Citigroup.
Englander expects average hourly earnings to be the key driver of the U.S. dollar’s performance. Annualized wage growth of 2.4% would “reduce the Fed’s discretion in delaying rate increases and lead to a second round of USD strength,” he said. The consensus forecast for wage growth, according to Englander, is 2.3%.