USD/CAD juggles around 1.3700 ahead of US/Canada labor market data
- USD/CAD trades sideways around 1.3700 as the focus shifts to US/Canada Employment data.
- The US private sector hired 89K job seekers in September, halved from the August reading of 180K.
- Canada’s fresh payrolls are seen lower at 20K and the jobless rate is seen higher at 5.6%.
The USD/CAD pair trades topsy-turvy near the round-level support of 1.3700 in the European session. The Loonie asset is expected to remain sideways as investors await the labor market data of the United States and Canada for September month.
S&P500 added some gains in the London session while the market mood was quiet. The US Dollar Index (DXY) has extended its downside to near 106.30 as investors expect that US labor market conditions will cool down. Investors' approach towards the US job market is shifting from ‘resilient’ to ‘stable’ after US ADP Employment Change data.
As per the US ADP report, the private sector hired 89K job seekers in September, halved from the August reading of 180K. A soft labor market report may fade expectations of one more interest rate increase by the Federal Reserve (Fed) in any of the last two monetary policy meetings in 2023. Also, the sell-off pace in the US treasuries would ease and hot yields may cool down.
San Francisco Fed Bank President Mary Daly said that another rate hike may not be needed if the labor market slows, inflation remains around 4% and financial conditions remain tight.
On the Canadian Dollar front, investors are also awaiting the labor market data. As per the estimates, fresh payrolls were lower at 20K from the August reading of 39.9K. The Unemployment Rate is seen increasing by a tick to 5.6% from the former release of 5.5%.
Meanwhile, the oil price weakens significantly amid a gloomy macroeconomic outlook. It is worth noting that Canada is the leading exporter of oil to the United States and lower oil prices impact the Canadian Dollar.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
