USD/CAD traders eye US NFP ahead of BoC later in the month

USD/CAD is trading near flat on the day within the bearish territory on the daily chart, consolidating nearer-term ahead of the US session's Nonfarm Payrolls data.

Meanwhile, the Canadian dollar has steadied against its US counterpart while investors cheered Canada's potential combination of increased government spending and interest rate hikes. On the other hand, the price of oil has taken a nosedive this week on the back of US President Joe Biden launching the largest release ever from the US emergency oil reserve.

One of Canada's major exports, oil, has fallen nearly 9% lower to fall below $100 a barrel. The move has seen the loonie fall from its strongest intraday level in nearly five months at 1.2427. For March, it was up 1.5%, while it has advanced 1.2% since the start of the year.

Meanwhile, the Bank of Canada will be back in focus now that Canadian Prime Minister Justin Trudeau's surprise political deal this month could lead to an increase in spending that further fuels inflation. The Bank of Canada is expected to hike its key interest rate in half-percentage-point increments. The April 13 meeting is therefore in focus.

Meanwhile, the Nonfarm Payrolls is coming up. ''Employment likely continued to advance in March following two strong reports averaging +580k in Jan and Feb,'' analysts at TD Securities said.  ''That said, we expect some of that boost to fizzle, though to a still firm job growth pace of +350k. Indeed, job gains should lead to a new drop in the unemployment rate to a post-COVID low of 3.7%. We also expect wage growth to slow to a still firm 0.3% MoM pace.''