Ella 
The USD/CAD pair fell for the fourth straight session, trading around 1.3610 in early European trading on Friday. The pair was dragged lower by a falling dollar as weak U.S. economic data boosted expectations of a rate cut by the Federal Reserve this year.
On Wednesday, the U.S. ISM Services Purchasing Managers’ Index (PMI) for June fell sharply to 48.8, the biggest drop since April 2020. The reading was well below market expectations of 52.5 and compared with 53.8 in May. The ADP employment report showed that U.S. private sector employers added 150,000 new employees in June, the smallest increase in five months. The figure was below expectations of 160,000 and below a downwardly revised 157,000 in May.
Traders are awaiting Friday’s U.S. jobs report, which is expected to show slower job growth in June. U.S. nonfarm payrolls (NFP) are expected to add 190,000 new jobs, down from 272,000 in the prior reading. Average hourly earnings in the US are expected to slow slightly year-over-year, expected to fall to 3.9% from 4.1% previously.
On the Canadian dollar front, a slight decline in crude oil prices could limit upside for the commodity-linked Canadian dollar (CAD) as Canada is a major crude oil exporter to the US. At the time of writing, West Texas Intermediate (WTI) crude oil was trading around $83.50 per barrel.
Recent data showed that the Organization of the Petroleum Exporting Countries (OPEC) increased production for the second consecutive month in June. This suggests that tightness in the oil market could ease in the coming months, putting downward pressure on crude oil prices.
In addition, the latest Canadian Composite Purchasing Managers’ Index (PMI) was released at 47.5, indicating a contraction in private sector output and easing cost pressures, suggesting that the Bank of Canada (BoC) may reduce borrowing costs. This could put pressure on the Canadian dollar and support gains in USD/CAD.
On Friday, traders will await Canada’s June net payrolls change, which is expected to fall to 22,500 from 26,700 previously. Meanwhile, Canada’s unemployment rate is expected to rise to 6.3% from 6.2%.
