USD/CAD holds steady close to 1.3900 as markets await employment figures from the US and Canada

USD/CAD Holds Firm Ahead of Key Employment Data

The USD/CAD currency pair remains resilient, trading close to its monthly peak of 1.3888 during Friday’s Asian session. This strength comes as traders anticipate the upcoming employment figures from both the United States and Canada for December.

Market forecasts suggest that the US Nonfarm Payrolls (NFP) report will indicate a gain of 60,000 jobs, a slight decrease from November’s 64,000. Additionally, the Unemployment Rate is projected to edge down to 4.5%, compared to the previous 4.6%.

Investors are expected to closely monitor the official US jobs data, as recent comments from Federal Reserve policymakers highlight their growing concern over labor market weakness, even as inflation remains above the 2% target.

In 2025, the Fed responded to these employment risks by implementing three separate 25 basis point interest rate reductions.

Leading up to the NFP release, the US Dollar Index (DXY)—which measures the dollar’s performance against a basket of six major currencies—hovers near a four-week high at approximately 98.85.

On the Canadian side, the latest employment report is anticipated to reveal a loss of 5,000 jobs in December, following a strong increase of 53,600 positions in November. The nation’s Unemployment Rate is expected to climb to 6.6% from 6.5%. Evidence of a softening labor market could increase speculation that the Bank of Canada (BoC) may consider easing monetary policy in the near future.