Ella 
The USD/CAD currency pair remained on the defensive below the 1.3400 mark during early Asian trading on Friday. The pair ended its four-week winning streak as the US Dollar (USD) lost momentum and fell to 103.00. Traders are awaiting the U.S. non-farm payrolls (NFP) report for January. The incident could trigger market volatility. USD/CAD is currently trading around 1.3376, down 0.09% on the day.
Data released on Thursday showed that the U.S. manufacturing purchasing managers’ index (PMI) improved significantly in January. The US S&P Global Manufacturing Purchasing Managers’ Index was 49.1, higher than market expectations of 47.0. The previous value was 47.1. The overall increase was mainly due to renewed growth in new orders and a slowdown in production contraction. Upbeat manufacturing PMI data failed to boost the dollar as traders digested information from the Federal Reserve’s January meeting.
Canada’s S&P Global Manufacturing Purchasing Managers’ Index (PMI) for January rose to 48.3 on Thursday from the previous reading of 45.4. Earlier this week, Canada’s real gross domestic product (GDP) increased by 0.2% in November. The growth figure shows the resilience of the Canadian economy and may reduce pressure on the Bank of Canada (BOC) to cut interest rates. Meanwhile, as Canada is the largest oil exporter to the United States, falling oil prices could put pressure on the commodity-linked Luan currency.
Market participants will be closely watching U.S. labor market data on Friday. U.S. nonfarm payrolls (NFP) are expected to increase by 185,000 jobs in January. The unemployment rate is expected to rise to 3.8%, and average hourly earnings are expected to increase 0.3% sequentially. In addition, the final values of U.S. factory orders and the University of Michigan Consumer Confidence Index will also be released. Traders will look for USD/CAD trading opportunities from this data.
