USD/CAD trades with caution near 1.3950 ahead of US employment, Services PMI data

USD/CAD faces selling pressure as the US Dollar remains on the backfoot.
US President Trump’s comments signaled that White House economic adviser Hassett is his preferred choice as the Fed’s next chairman.
Investors await US ADP Employment, ISM Services PMI, and the Canadian labor market data for November.

Sagar Dua FXStreet

The USD/CAD pair trades cautiously near 1.3960 during the European trading session on Wednesday. The Loonie pair struggles to gain ground as the US Dollar (USD) is under pressure, following hints from United States (US) President Donald Trump that White House Economic Adviser Kevin Hassett could be the successor of Federal Reserve (Fed) Chair Jerome Powell when his term ends in May 2026.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades slightly lower to near 99.10.

On Tuesday, US President Trump stated that he has narrowed the list of potential Fed’s next chair candidates to one, which will be announced in early 2026, adding the name of White House adviser Hassett in his comments.

“I guess a potential Fed chair is here too. Am I allowed to say that? Potential. He’s a respected person, that I can tell you. Thank you, Kevin," Trump said, Reuters reported.

Meanwhile, investors await the US ADP Employment Change and the ISM Services Purchasing Managers’ Index (PMI) data for November, which will be published during the North American session. The impact of the US private sector employment data will be significant on expectations towards the Federal Reserve’s monetary policy outlook, given that a majority of officials, including Jerome Powell, have warned of downside labor market risks.

This week, the Canadian Dollar (CAD) will be influenced by the labor market data for November, which will be released on Friday. The Canadian Unemployment Rate is expected to come in higher at 7% from 6.9% in October. Meanwhile, the overall laborforce is expected to have remained flat.

Economic Indicator

ADP Employment Change

The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.

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.

GBP/USD hangs close to 1.3500, awaits fresh impetus from US CPI

GBP/USD keeps its range around 1.3500 in Wednesday's European trading. The pair continues to trade with caution as the US Dollar (USD) holds ground ahead of a crucial US consumer inflation report. Investors are watching this upcoming reading closely, as it is expected to play a major role in shaping the Federal Reserve’s next interest rate decision and the USD valuation.

EUR/USD consolidates below 1.1550 ahead of US CPI

EUR/USD struggles to gain any meaningful traction and holds steady around 1.1550 in the European trading hours on Wednesday, maintaining a familiar range held over the past week or so. Traders keenly await the release of the key US inflation data and further developments surrounding the Middle East crisis before placing fresh directional bets.

Gold retakes $4,400, eyes two-month high as traders look to US CPI for Fed hike cues

Gold attracts fresh buyers during the Asian session on Wednesday and climbs back above the $4,400 mark, closer to its highest level since June 5, which was touched the previous day. Traders now look to the US Consumer Price Index report for more cues about the US Federal Reserve's future policy path amid inflation risks stemming from volatile oil prices.

Crypto Overview: Bitcoin loses $64,000 – LINK, DOGE sustain gains

Bitcoin is trading below $64,000 amid a broader market risk-off sentiment. Emerging as top performers over the last 24 hours, Chainlink and Dogecoin sustain gains, hinting at an extended recovery. CoinMarketCap’s Fear and Greed Index at 38 reflects persistent risk-averse sentiment in the crypto market.

AI defies the disinflationary playbook: Why lower oil prices might not be enough to cool core inflation

The global economic landscape has been fixated on the Middle East since the US-Iran war started in late February, reacting to significant changes in crude Oil prices and assessing how they could influence inflation dynamics and growth outlook.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.