- The non -agricultural payrolls of the United States are expected to be 110,000 in July, below the 147,000 registered in June.
- The US unemployment rate is expected to have increased to 4.2% from 4.1% in the month.
- The US dollar closes Julio with solid profits, breaking a loss streak of five months.
A quite agitated week is coming to an end with the publication of the United States Non -Agricultural Payroll (NFP) data (US) for July, which will be published by the Office of Labor Statistics (BLS) on Friday at 12:30 GMT.
The report is a snapshot of the labor market at the end of each month, which is generally published on the first Friday of the following month. Indicates how many new jobs were added, how salary growth and unemployment rate were developed. The Federal Reserve (FED) uses this data to make its monetary policy decisions in the middle of its double mandate to maintain stable prices and maximum employment. However, this time, the Fed announced its last decision this Wednesday, somehow limiting the potential impact of the NFP on financial markets.
What to expect from the Julio Non -Agricultural Payroll Report?
Market analysts anticipated that USA added 110,000 new jobs in July, below 147,000 cattle in June. The unemployment rate is expected to increase, from 4.1% to 4.2%.
In addition, salary inflation is expected, measured by average average earnings per hour, 0.3% in the month and 3.8% compared to the previous year, exceeding 0.2% and 3.7% respectively registered in June.
Before the publication, multiple figures related to employment suggest a healthy labor market, while the Fed has remained in its position to wait and see.
In the Front of Economic Data, the USA reported that the number of job offers on the last business day of June stood at 7.43 million, according to the Employment and Work Rotation Survey (Jolts) published by the BLS. The reading was below 7.77 million offers (reviewed from 7.76 million) registered in May and was below the market expectation of 7.55 million.
The ADP employment change report published Wednesday was more encouraging, since it showed that the private sector added 104,000 new jobs in July, while the June loss was reviewed to 23,000 from the previous estimate of -33,000.
Meanwhile, the Fed announced that it left the reference interest rate without changes, oscillating between 4.25% and 4.50% after its July meeting. Within the Federal Open Market Committee (FOMC), two dissidents voted in favor of a rate cut: governors Christopher Waller and Michelle Bowman.
President Jerome Powell explained that, with inflation even above the objective of 2% of the Fed and the labor market still adjusted, the Central Bank should keep the rates at its current levels, while leaving those responsible for the policy well positioned to respond in a timely manner. Powell also refused to give in to the constant pressure of US President Trump to lower interest rates, reiterating that the impact of tariffs on inflation is still to be seen.
Given Powell’s hard line position, the probabilities of a rate cut in September fell from 60% before the meeting at approximately 43% after the press conference, according to the CME Fedwatch tool.
It is worth noting that the preliminary estimate of the Gross Domestic Product (GDP) of the second quarter showed that the US economy grew at an annualized rate of 3%, much better than the 0.5% drop in the first quarter and better than the 2.4% expected.
How will the non -agricultural payrolls of July of the USA to the EUR/USD affect?
Holders related to the commercial war in recent days have been mixed. The week began with optimism after the announcement of an agreement between the US and the European Union (EU), which followed a similar announcement between the US and Japan. The White House also reported on continuous conversations with China. The hopes of an agreement helped the US dollar (USD) to advance in front of all its main rivals, while the hard line posture fed the dollar rally.
In the middle of the week, however, already measured the deadline of August 1, agreements with other important commercial partners such as Canada, Australia or India were, and are still, in the air. In addition, Trump announced an amazing 50% tariff on Brazilian imports and a 50% universal tariff on imports of semiterminated copper products and copper intensive products, effective as of August 1.
The USD maintains its strength before the publication of the NFP, with the EUR/USD torque contributing near the threshold of 1,1400. In general terms, a solid NFP report that shows a job creation superior to anticipated and a stable unemployment rate should increase demand for the US currency, not only for the good news, but also because it reinforces the waiting position of the Fed. The opposite scenario is also valid, with a disappointing holder accompanied by a higher unemployment rate than the anticipated one that would weigh the dollar.
A moderate job creation along with an increase in the unemployment rate, as expected, could have a limited impact, but would be generally positive for the USD.
Valeria Bednarik, chief analyst at FXSTERET, says: “The EUR/USD torque quotes at its lowest level in more than a month, losing approximately 400 pips since its July peak in 1,1830. The advance of the USD was a very anticipated correction, since the dollar index fell for five consecutive months before changing the trend in July. Taking this into account, the EUR/USD could cross the level of the level of 1,1400 in a strong NFP report and extend its fall to the region of 1,1340, where it established a monthly minimum in June.
Bednarik adds: “The EUR/USD pair needs to recover the level of 1,1470 to shake the bassist impulse and to extend its recovery towards the area of 1,1550. However, a weekly closure around the latter will not be enough to confirm an interim minimum, with the risk still biased down in the medium term.”
(This story was corrected on August 1 at 08:00 GMT to mention Julio instead of June in the subtitle ‘How will the non -agricultural payrolls of July of the United States affect the EUR/USD?’)
EMPLOYMENT – FREQUENT QUESTIONS
The conditions of the labor market are a key element to evaluate the health of an economy and, therefore, a key factor for the assessment of currencies. A high level of employment, or a low level of unemployment, has positive implications for consumer spending and, therefore, for economic growth, which drives the value of the local currency. On the other hand, a very adjusted labor market – a situation in which there is a shortage of workers to cover vacancies – can also have implications in inflation levels and, therefore, in monetary policy, since a low labor supply and high demand lead to higher wages.
The rhythm to which salaries grow in an economy is key to political leaders. A high salary growth means that households have more money to spend, which usually translates into increases in consumer goods. Unlike other more volatile inflation sources, such as energy prices, salary growth is considered a key component of the underlying and persistent inflation, since it is unlikely that salary increases will fall apart. Central banks around the world pay close attention to salary growth data when deciding their monetary policy.
The weight that each central bank assigns to the conditions of the labor market depends on its objectives. Some central banks have explicitly related mandates to the labor market beyond controlling inflation levels. The United States Federal Reserve (Fed), for example, has the double mandate to promote maximum employment and stable prices. Meanwhile, the only mandate of the European Central Bank (ECB) is to maintain inflation under control. Even so, and despite the mandates they have, labor market conditions are an important factor for the authorities given its importance as an indicator of the health of the economy and its direct relationship with inflation.
Economic indicator
Fed interest rates decision
The Federal Reserve (Fed) Delibera on monetary policy and makes a decision on interest rates in eight preprogrammed meetings per year. It has two mandates: maintain inflation in 2% and maintain full employment. Its main tool to achieve this is to establish interest rates, both to those that it lends to banks and to those that banks lend each other. If you decide to raise the fees, the US dollar (USD) tends to strengthen since it attracts more foreign capital tickets. If the rates lower, it tends to weaken the USD since capital is drained towards countries that offer greater returns. If the rates remain unchanged, the attention focuses on the tone of the Federal Open Market Committee (FOMC), and if it is a hard line (expectancy of higher interest rates in the future) or moderate (expectation of lower rates in the future).
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Last publication:
LIE Jul 30, 2025 18:00
Frequency:
Irregular
Current:
4.5%
Dear:
4.5%
Previous:
4.5%
Fountain:
Federal Reserve
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
