Ella 
In Asia on Thursday, USD/CAD retraced recent losses and was trading around 1.3510. The dollar held steady, with traders taking a cautious approach ahead of U.S. ISM Services Purchasing Managers’ Index (PMI) and initial jobless claims releases later in the North American session.
Focus will turn to Friday’s U.S. non-farm payrolls (NFP) data for more clues on the potential extent of the Federal Reserve’s (Fed) rate cut expected this month.
The U.S. Dollar Index (DXY), which measures the greenback’s value against six other major currencies, is trading around 101.30. At the time of writing, U.S. 2-year Treasury yields and 10-year Treasury yields were at 3.76% and 3.75% respectively, providing support for the dollar.
However, the dollar faced challenges following the release of U.S. JOLTS job openings for July, which came in below expectations and showed a further slowdown in the labor market. U.S. JOLTs job openings fell to 7.673 million in July from 7.91 million in June. This is the lowest level since January 2021 and is below the expected value of 8.1 million.
On Wednesday, the Bank of Canada (BOC) cut its benchmark interest rate by 25 basis points (bps) to 4.25% at its September meeting, as expected. Bank of Canada Governor Tiff Macklem commented that if inflation continues to decline, broadly in line with our July forecast, further reductions in our policy rate are likely.
Governor McCallum also noted that a 25 basis point cut seemed appropriate, noting that disagreements with the U.S. Federal Reserve over interest rate policy had not had a significant impact on the exchange rate.
