USD/CAD Remains Under Selling Pressure Near 1.3600 Ahead Of US/Canadian Employment Data

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  • USD/CAD trades in negative territory for the fourth consecutive day near 1.3605 in Friday’s early Asian session. 
  • The recent discouraging US economic data have fuelled the chance of a Fed September rate cut, weighing the US Dollar. 
  • Canadian Net Change in Employment is expected to decline to 22.5K versus 26.7K prior. 

The USD/CAD pair trades on a negative note around 1.3605 during the early Asian session on Friday. The downtick of the pair is backed by the weaker US Dollar (USD) boardly. The release of US and Canadian employment reports will be the highlights on Friday. 

Market consensus forecasts the US employment growth slowed in June, with a 190,000 increase in Nonfarm Payrolls (NFP). The Unemployment Rate is expected to remain steady at 4.0%, partially due to a forecast decline in the participation rate last month. 

The recent softer US PCE inflation and weaker Services PMI have raised the chance of a Federal Reserve (Fed) September rate cut, with the markets pricing a 70% odds leading into the NFP release of that occurring. The markets also see a second rate cut in December, which is priced in around an 80% probability. This, in turn, exerts some selling pressure on the Greenback. 

On the Loonie front, the Canadian Net Change in Employment is expected to drop to 22.5K from the previous reading of 26.7K. The Canadian Unemployment Rate is projected to tick higher to 6.3% from 6.2%. Meanwhile, the modest decline in crude oil price might weigh on the commodity-linked Canadian Dollar (CAD), as Canada is the major crude oil exporter to the United States.

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