Traders await US JOLTS job openings and July employment data, which could influence Fed policy and USD strength.
The USD/CAD pair climbed to near 1.4050 in early European trading Tuesday, driven by anticipation of key US labor market data. The US JOLTS Job Openings report is due later today, followed by July employment figures on Friday.
Market focus remains on the Federal Reserve’s next move, with a 64.7% probability of a September rate hike priced in. Stronger-than-expected jobs data could reinforce higher-for-longer US interest rates, supporting the USD. Meanwhile, geopolitical tensions between the US and Iran add volatility, with potential impacts on oil prices and the CAD.
Canada’s status as a major oil exporter means crude price fluctuations often influence the Loonie. Any escalation in US-Iran tensions could lift oil prices, providing support for the CAD against the USD.