During early Asian trading on Wednesday, the USD/CAD pair edged lower to 1.3675, supported by a weakened US Dollar (USD). The upcoming session is poised for further movement as traders await key economic indicators including the US ADP Employment Change, ISM Services PMI for June, and the FOMC Minutes.
Federal Reserve Chair Jerome Powell’s recent comments leaned slightly dovish, exerting downward pressure on the Greenback. Powell acknowledged the Fed‘s return to a disinflationary trajectory but emphasized the need for more evidence before considering interest rate cuts, citing a robust US economy and strong labor market. In contrast, Chicago Fed President Austan Goolsbee expressed optimism, foreseeing quicker progress towards the Fed’s 2% inflation target.
In economic updates, US JOLTS Job Openings for May surpassed expectations at 8.14 million, up from April’s revised 7.91 million, signaling strength in the labor market.
On the Canadian front, June saw weak manufacturing activity with the S&P Global Manufacturing PMI holding steady at 49.3, indicating contraction for the 14th consecutive month. This downturn included declines in new orders and employment, marking the longest such period since October 2010.
Looking ahead, market focus shifts to Friday’s release of Canadian employment data. Forecasts suggest an uptick in the Unemployment Rate to 6.3% for June, alongside an expected addition of 22.5K jobs, shaping sentiment around the Canadian economy.
The USD/CAD pair remains sensitive to these economic indicators, poised to react as market sentiment shifts based on incoming data and Federal Reserve developments.
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