Dollar regains ground, awaiting NFP jobs

The US Dollar is appreciating against its main peers on Friday, with investors closing Dollar lows ahead of the release of November’s Nonfarm Payrolls report.

The USDJPY pair has bounced from the 149.75 area to retrace Thursday’s losses and return to the upper range of the 150.00s. The broader trend remains bearish, with the pair 3.5% below mid-November highs, amid the divergent monetary policy expectations of the Federal Reserve and the Bank of Japan.

The focus on Friday is on the NFP report. The US economy is expected to have added 200,000 new jobs in November, with the unemployment rate ticking up to 4.2%.

Investors expect strong job creation, with higher unemployment and softer wage pressures, to cement hopes that the Fed will cut rates by a 25 bps cut in two weeks. Any deviation from these figures might boost volatility on US Dollar crosses.

In Japan, the market consensus anticipates a 25 bps hike later this month. That said, the dovish comments by board member Nakamura on Thursday have cast some doubts on the final decision, weighing on the Yen.

(Source: OANDA)