The USD/CAD pair continues to trade with an upward bias after breaking above its 200-day moving average at 1.3976, signaling sustained bullish momentum. Market attention is now focused on Canada’s September labor force survey, which could heavily influence the Canadian dollar (CAD).
Following significant job losses in July (-40.8K) and August (-65.5K), expectations for September remain modest, with a forecast of just 5,000 job additions. A weaker-than-expected report could increase pressure on the Bank of Canada (BoC) to cut interest rates further, potentially pushing the policy rate below its estimated neutral range of 2.25%–3.25%.
According to BBH FX analysts, the swaps market is already fully pricing in a 25 basis point rate cut by the end of the year. A disappointing jobs report could reinforce this outlook, adding to the bearish pressure on the loonie.
The labor force survey is set to be released at 8:30 a.m. New York time (1:30 p.m. London).