Investors await July Nonfarm Payrolls and Canadian employment reports to gauge Fed and BoC policy paths amid Middle East tensions.
USD/CAD trades at 1.4020, up 0.06% on Friday, as markets adopt a cautious stance before key US and Canadian employment releases. Safe-haven demand supports the USD amid ongoing Middle East tensions, particularly uncertainty over the Strait of Hormuz reopening and Iran’s proposed restrictions on US and Israeli vessels.
Economists expect the US economy to add 80K jobs in July, following June’s 57K gain, with the Unemployment Rate steady at 4.2%. Annual wage growth is forecast to remain at 3.5%. Canadian employment data may also influence the Bank of Canada’s policy outlook, especially with oil prices providing support to the CAD.
US Treasury yields remain elevated as Fed officials signal a prolonged restrictive stance if inflation persists. The upcoming jobs reports could drive volatility in the USD and shape expectations for future rate moves.