US Dollar Index edges lower below 97.00 on downbeat US job data, Fed rate cut bets

• The US Dollar Index loses ground to 96.70 in Thursday's early Asian session. 
• US June private payrolls posted the first decline in more than two years.
• Traders will closely watch the US June NFP report later on Thursday.

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, remains on the defensive near 96.70 during the early Asian session on Thursday. All eyes will be on the release of highly-anticipated US Nonfarm Payrolls (NFP) data for June, which is due later on Thursday. 

The Greenback edges lower after the ADP National Employment Report showed US private payrolls fell for the first time in more than two years in June. US private-sector payrolls decreased 33,000 in June after a downwardly revised 29,000 gain in May. This figure came in below the market consensus of 95,000. 

This downbeat report has supported market expectations of a Federal Reserve (Fed) interest rate cut, weighing on the USD. Also, the dovish comments from the Fed officials contribute to the USD's downside. Fed Chair Jerome Powell said on Tuesday that he would not rule out a potential interest rate cut at this month's meeting, adding that everything depends on incoming data.

Traders brace for the US June employment data on Thursday for fresh impetus as it might offer some hints about the timing of interest rate reductions by the Fed. Economists expect the US NFP to increase by 110,000 in June. 

Additionally, the Unemployment Rate is expected to ticker higher to 4.3% in June, while Average Hourly Earnings is estimated to remain steady at 3.9% YoY in the same report period. Any surprise upside in the US employment data could help limit the USD's losses