U.S. dollar reclaims gains before jobs report

Today’s hotly-anticipated jobs report could either put the U.S. dollar into a halt, or it would prolong the dollar’s best performance in years.

Investors expect a sharp rebound in September for job growth, and are also seeing a notable revision to August’s disappointing report.

The U.S. economy probably made some 215,000 jobs in September after a preliminary 142,000 in August, which if seen today, it could ease doubts about the job market as it would revert to the rapid pace seen before August.

The non-farm payrolls report will be released at 08:30 a.m. ET (12:30 GMT).

When looking at historical numbers, job growth in September is usually below average compared with the rest of the year, but this September could prove otherwise.

But also, recent history supports a more bullish view for August, as job growth in August has been revised up by an average of 70,000 compared with the first reading.

Also, since late 2013, the composition of hiring in the U.S. has been improving. A notable shift towards higher paying jobs has been seen.

For some, the biggest key for the jobs report that would substantialy increase interest-rate hype would be wage growth. If data showed above-average wage growth, the market reaction would be much more frantic.

However, a disappointing jobs report would see a temporary drop in the U.S. dollar against other majors.

The dollar may regain composure and continue its rally as its recent gains were largely attributed to the divergence in monetary policy between the Federal Reserve and other central banks, and the improving condition of the U.S. economy compared to other major economies.

The U.S. dollar retraced most of its gains early Friday ahead of the jobs report after Thursday’s pause against most major currencies.

The U.S. dollar index is heading for its seventh weekly gain, the strongest streak since June 2010, and was last up 0.42% to 85.98.

The euro continued to go lower after Thursday’s spike on the European Central Bank’s decision to hold off fresh stimulus measures. The EUR/USD fell 0.36% to 1.26203.

The yen fell against all counterparts as after the Bank of Japan increased bond purchases and said a weaker yen was unlikely to hurt the economy. The USD/JPY was up 0.51% to 108.952. As of 06:53 a.m. ET

The Australian dollar fell 0.51% to $0.87549.