CURRENCIES: Dollar In Holding Pattern As Nonfarm Payrolls Could 'make Or Break' The Currency

By Victor Reklaitis, MarketWatch Features Dow Jones Newswires

Analyst: Dollar bulls are 'desperate for something'

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The dollar was little changed Friday as traders braced for a U.S. jobs report that might spark big moves for the buck.

The ICE U.S. Dollar Index -- which measures the currency against a half-dozen rivals -- recently stood at 92.7450, up slightly from 92.6500 late Thursday in New York.

The August report on nonfarm payrolls "could make or break the dollar" because it's the last jobs release before the Federal Reserve's meeting later this month, said Kathy Lien, managing director of FX strategy for BK Asset Management, in a note.

The U.S. central bank isn't expected to raise interest rates until December at the earliest, but "investors are desperate for something to validate the dollar's (UUP) recent rally," she said.

"When it comes to this report, the ONLY question that matters is whether job and wage growth is strong enough for the Federal Reserve to raise interest rates at the end of the year," Lien added, and that's "even though the Fed doesn't need to make a decision now."

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Read more:August jobs release is crucial test for U.S. dollar (http://www.marketwatch.com/story/august-jobs-data-marks-crucial-test-for-us-dollar-2017-08-30)

ICE's dollar gauge briefly rose above 93 on Thursday, rallying from a two-and-a-half year low hit Tuesday (http://www.marketwatch.com/story/dollar-dives-to-lowest-since-early-2015-rattled-by-north-korea-missile-launch-2017-08-29), but it then ended lower (http://www.marketwatch.com/story/dollar-rises-aims-for-its-first-monthly-gain-since-february-2017-08-31). The index is on track to finish little changed for the week, leaving the index down 9% for the year.

Economists polled by MarketWatch expect the U.S. economy added 170,000 jobs last month, as the unemployment rate stayed at 4.3% and average hourly earnings rose by 0.2%.

The nonfarm payrolls report was slated to arrive at 8:30 a.m. Eastern Time from the Labor Department.

Check out:August jobs report likely will show U.S. kept pumping out jobs (http://www.marketwatch.com/story/august-employment-report-likely-to-show-us-kept-pumping-out-jobs-in-late-summer-2017-08-31)

The euro changed hands at $1.1894, down slightly from $1.1910 late Thursday in New York, as some analysts speculated about whether the European Central Bank will try to talk the rallying currency lower (https://www.poundsterlinglive.com/eur/7427-never-mind-the-ecb-says-deutsche-bank-euro-dollar-rate-is-justified) at its meeting next week. The shared currency has gained 13% against the dollar so far this year.

The British pound was roughly unchanged at $1.2931 even as U.K. manufacturing data for August unexpectedly hit a four-month high, while the dollar edged up against the Japanese yen , rising to Yen110.06 from Yen109.98 late Thursday.

(END) Dow Jones Newswires

September 01, 2017 06:27 ET (10:27 GMT)