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- USD/CAD trades on a flat note around 1.4060 in Friday’s early European session.
- The delayed US Nonfarm Payrolls (NFP) data will be in the spotlight later on Thursday.
- Lower crude oil prices could drag the Canadian Dollar lower.
The USD/CAD pair holds steady near 1.4060 during the early European session on Thursday. Traders brace for the upcoming US Nonfarm Payrolls (NFP) data to provide clues about the potential for an interest-rate cut next month. Meanwhile, lower crude oil prices could weigh on the commodity-linked Canadian Dollar (CAD) against the Greenback.
The US Bureau of Labor Statistics (BLS) will release the September employment report on Thursday, which was delayed by the 43-day government shutdown. Economists expect to see 50,000 jobs added in the US economy in September, while the Unemployment Rate is projected to stay unchanged at 4.3%.
A weaker-than-expected jobs report could signal an economic slowdown, prompting the Federal Reserve (Fed) to cut interest rates. This, in turn, could undermine the Greenback in the near term. The CME FedWatch tool suggests that financial markets are now pricing in a 33% possibility that the US central bank will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from the 63% chance that markets priced a week ago.
Meanwhile, crude oil prices edge lower after a report of a US proposal to end the Russian war in Ukraine, which could weigh on the commodity-linked Loonie and act as a tailwind for the pair. It’s worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value
