(Bloomberg) -- The dollar’s slide to the lowest in more than two weeks has reignited the debate that the greenback is on the cusp of a sustained downturn. For Kit Juckes at Societe Generale, it’s too early to make that call ahead of the US monthly payrolls report on Friday.

“If Friday’s data comes out strong, it will rally,” Juckes said. “As much as I would like to embrace the weaker dollar, I can’t really, yet.”

The greenback has bounced back from a more than one-year low reached in mid-July as a strong labor market and resilient economy boosted expectations the Federal Reserve would keep interest rates higher for longer. The rally upended calls by many strategists early last month that dollar was on the verge of a multi-year weakening trend.

But the table turned this week with weak job creation figures and data showing the US economy grew at a slower pace than reported earlier. That has sent the Bloomberg Dollar Spot Index sharply lower, down for a third day to the lowest since mid-August. 

Against that backdrop, the focus shifts to the monthly payrolls to confirm the latest softening trend in the data. Employers are forecast to add 170,000 jobs in August, from a prior reading of 187,00, according the median estimate in a Bloomberg survey, while the projections range from a low of 120,000 to a high of 230,000.

“A strong payroll number on Friday and we can turn on a dime and go the other way,” Juckes said. 

Juckes still he sees the dollar weakening in the medium term, but notes that Stephen Gallagher at SocGen among the top 20 forecasters is predicting a robust gain of 215,000. 

The dollar has weakened this week as traders pared wagers on prospects for Fed rate hikes. On Wednesday, swaps tied to Fed meeting dates priced in slightly less than a 50% chance of another quarter-point rate increase this year, down from about 75% earlier this week. Contracts for the next meeting in September only give about a 1-in-6 chance of an increase. 

“I don’t think many people expect anything from the Fed in September, so we’re going to be staring at every release until a clearer picture emerges,” he added. “We are bound to over-react to everything.”

--With assistance from Carter Johnson.

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