Multiple economic data point to a slowdown in US non-farm payrolls in July!

Deutsche Bank expects the US dollar index to weaken as several US economic data point to a slowdown in non-farm payrolls in July.

On 8.2, the dollar extended its downward trend, with the dollar index down 0.21% at 103.89 as of writing.

As investors are waiting for tonight's release of U.S. Non-farm payrolls data for July will provide clues to the Federal Reserve's future interest rate cuts, the market is expected to slow job growth in July, the number of non-farm payrolls will increase by 175,000 people in the month, lower than the previous value of 206,000 people, and the unemployment rate is expected to be unchanged from the previous month, remaining at 4.1 percent.

The latest report from Volkmar Baur, FX analyst at Deutsche Bank, suggests that the market is set to make waves again tonight as non-farm payroll growth is set to slow, especially after Fed Chairman Jerome Powell stressed on Wednesday that the labor market is now more of a concern for the Fed.

He said: 'We got a little taste of that yesterday. Yesterday's further contract in the U.S. ISM manufacturing activity and employment in July led to dollar weakness.

In addition, US initial jobless claims for the week soared to a near one-year high, also giving a strong hint that the job market is slowing down. Data showed that US initial jobless claims came in at 249,000 for the week ended 27 July, higher than the market's expectation of 236,000 and up 14,000 from the revised previous figure of 235,000.

It is worth noting that a slowdown in non-farm payrolls, as expected, would further drag the dollar lower.