• US Nonfarm Payrolls are forecast to rise 160K in August after gaining merely by 114K in July.
• The United States Bureau of Labor Statistics will release the critical jobs report on Friday at 12:30 GMT.
• The employment data could help gauge the size of the Fed interest-rate cut in September, rocking the US Dollar.

The United States Bureau of Labor Statistics (BLS) will publish August's highly anticipated Nonfarm Payrolls (NFP) data on Friday at 12:30 GMT.

The US labor market data hold the key for markets to gauge the size of the expected interest-rate cut by the US Federal Reserve (Fed) in September, ramping up the volatility around the US Dollar (USD).

What to expect in the next Nonfarm Payrolls report?

The Nonfarm Payrolls report is forecast to show that the US economy added 160,000 jobs in August, after creating 114,000 in July.

The Unemployment Rate is likely to dip to 4.2% in the same period from July’s 4.3% reading. Meanwhile, a closely-watched measure of wage inflation, Average Hourly Earnings, is seen increasing by 3.7% in the year through August after rising 3.6% in July.

The August employment data will offer significant insights into the strength of the US labor market, which are critical to shaping the Fed interest-rate outlook at the September 17-18 policy meeting and beyond.

Fed Chairman Jerome Powell indicated during his opening remarks at the Jackson Hole Symposium last month that an "unwelcome further cooling in the labor market" could warrant more aggressive policy action, fanning a 50 basis point (bps) interest rate cut.

Meanwhile, the Fed tweaked its July policy statement to mention that it is "attentive to the risks to both sides of its dual mandate", rather than previously only noting its attention to inflation risks.