Dollar Down, Near One-Month Low Ahead Of U.S. Jobs Report

The dollar was down on Friday morning in Asia, tumbling to its lowest level in almost a month as the week draws to a close. Investors now await the latest U.S. jobs report that could prod the Federal Reserve to begin asset tapering earlier than expected.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.04% to 92.188 by 10:32 PM ET (2:32 AM GMT). It hit the 92.189-mark earlier for the first time since Aug. 5.

The USD/JPY pair inched down 0.03% to 109.89.

The AUD/USD pair inched up 0.05% to 0.7402, with Australia releasing retail sales figures earlier in the day. The NZD/USD pair edged up 0.13% to 0.7114.

The USD/CNY pair inched up 0.05% to 6.4593. China’s Caixin services purchasing managers’ index (PMI) for August was 46.7, below the 50-mark indicating growth.

The GBP/USD pair inched up 0.08% to 1.3841.

The U.S. jobs report, including non-farm payrolls, is due later in the day. However, the non-farm payrolls estimate ranges from as little as 375,000 to over a million.

A Commonwealth Bank of Australia (OTC:CMWAY) note forecasts the U.S. added 800,000 jobs in August, which is enough to spur the Fed to begin asset tapering although the bar for an announcement at the central bank’s next meeting has been raised by the current COVID-19 outbreak.

"The risk is uncertainty associated with COVID-19 stands in the way of an imminent asset tapering announcement," which would reverse any dollar gains from a strong payrolls report, the note added.

The Fed has made labor market recovery a condition to begin asset tapering, with expectations that it would begin imminently giving the U.S. currency a boost for much of August. Although the number of COVID-19 cases in the U.S. also climbed, this further boosted the safe-haven dollar.

However, investors sounded a retreat from the dollar’s nine-and-a-half-month high hit on Aug. 20 as the Fed hinted that it could delay tightening monetary policy due to the COVID-19 outbreak.

Fed Chairman Jerome Powell indicated that asset tapering could still possibly begin within 2021 at the Jackson Hole symposium that took place during the previous week. He also said that there was no rush to subsequently hike interest rates, which sent the greenback down further.

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