USD braces for August NFP: +56K consensus after July's -23K contraction

The US dollar heads into Friday's August non-farm payrolls report with consensus looking for a modest +56K headline gain, rebounding from July's -23K contraction and June's +63K print. The private payrolls consensus sits at +45K, while the unemployment rate is seen unchanged at 4.1% and participation steady at 61.4%. U6 underemployment stood at 7.9% previously. Wage data will be closely watched, with average hourly earnings expected at +0.3% m/m (from +0.1%) and +3.0% y/y, down from +3.2%. Average weekly hours are forecast flat at 34.3. Leading indicators paint a soft picture: ADP employment rose just +38K versus +47K expected and +46K prior, while the ISM services employment index remained in contraction at 47.8, albeit up from 47.4. With labour demand cooling and Fed officials leaning dovish, a sub-consensus print would reinforce rate-cut pricing and pressure the dollar across EUR/USD, USD/JPY and USD/CHF, while an upside surprise risks a sharp short-covering bounce in the greenback.