USD/CAD Moves In a Range Below 1.3600 And The BoC Rate Decision And The US Services PMI Are Being Watched

During Tuesday's early Asian trade hours, the USD/CAD pair keeps its losses below the 1.3600 mark. At the moment, the major pair is trading near 1.3595, which is up 0.03% for the day. After the Labour Day break in the US and Canada, the pair can't move as much. Investors are waiting for the Bank of Canada (BoC) to decide on the interest rate, and the markets expect the policy to stay the same.

Last week, economic news from the US was mixed. Nonfarm Payrolls (NFP) for August came in at 187K, which was more than expected at 170K and more than the previous number of 157K. Still, the jobless rate fell a lot, from 3.5% to 3.8%, which was much lower than what the market expected and the rate before. The US Manufacturing PMI came in at 47.6, up from 46.4, and was higher than what the market had expected, which was 47.0.

At the Jackson Hole Symposium, Fed Chairman Jerome Powell said that a possible rate increase would rely on new information. But market players bet that the Federal Reserve (Fed) will be less active because of the mixed economic data. The CME FedWatch Tool says that the chances of leaving the interest rate the same at the September meeting are still 93%. This, in turn, could limit the USD's rise and work against the USD/CAD pair.

About the statistics from last week, the Canadian real Gross Domestic Product (GDP) Annualised for the second quarter fell by 0.2% YoY, which is less than the 2.6% reading from the previous quarter. The growth number was worse than the 1.2% growth that was predicted. The bad news about Canada caused the Canadian Dollar (CAD) to lose some value.

On Wednesday, the Bank of Canada (BoC) will decide what the interest rate will be. A Reuters poll says that the BoC is likely to keep its key interest rate at 5% on Wednesday and keep it there until at least the end of March 2024. Also, since Canada is the biggest supplier of crude oil to the US, a rise in oil prices makes the Canadian Dollar stronger against other currencies.

In the future, everyone will be paying attention to what the BoC decides about interest rates. The US ISM Services PMI for August will be released later this week on Wednesday. It is expected to rise to 52.6. Friday's speech by BoC Governor Tiff Macklem and the Canadian Unemployment Rate could give hints about the rest of the year's monetary policy, and the data could give the USD/CAD pair a clear direction.