With the highly anticipated U.S. nonfarm payrolls report set to be released on Friday, analysts at ING are warning that there is a possibility of disappointing results. This could potentially have an impact on financial markets, including cryptocurrencies such as bitcoin.
The report, which is scheduled to be released at 8:30 ET (12:30 UTC), is expected to show that the U.S. economy added 185,000 jobs in July. This is a decrease from the 206,000 jobs added in June. Additionally, the jobless rate is forecasted to remain at 4.1%, while the annual growth in hourly wages is expected to slow down to 3.7%.
Analysts at ING have pointed out that indicators from employment surveys suggest that there is a higher likelihood of a weaker-than-expected payroll report. This bearish view on the dollar could be further exacerbated if the report does indeed come in weaker than anticipated.
A disappointing report would likely increase expectations for interest rate cuts by the Federal Reserve later this year. This could diminish the appeal of the dollar, as traders are already anticipating rate cuts to begin in September. Despite Fed Chairman Jerome Powell’s recent comments ruling out significant rate cuts, macroeconomic factors may still push the dollar lower once the current equity market volatility and geopolitical tensions ease.
A weaker dollar typically leads to increased demand for riskier assets, including cryptocurrencies like bitcoin. As the global reserve currency, the dollar has a significant impact on financial conditions, and a decrease in its value often prompts investors to turn to alternative assets.
Ahead of the release of the payrolls report, bitcoin has seen some volatility, bouncing back from a low of around $62,200 to $64,500. Analysts are predicting that a potential Fed rate cut could push bitcoin to new highs above $74,000 in the coming months.
Overall, the upcoming nonfarm payrolls report has the potential to influence market expectations and could have a significant impact on various financial assets, including cryptocurrencies. Investors will be closely watching the results to gauge the future direction of the U.S. economy and the implications for monetary policy.