USD/CAD Weak Below 1.3700 Ahead Of Fed Minutes

USD/CAD fell to 1.3675 in early Asian trading on Wednesday as the U.S. dollar weakened. Traders will get more clues from the U.S. June ADP employment change, ISM services PMI and Fed minutes to be released later on Wednesday.

On Tuesday, Federal Reserve (FED) Chairman Powell spoke slightly dovishly, dragging the dollar lower. Powell said the Fed is getting back on track to deflation. However, Powell wants to see further evidence before cutting rates as the U.S. economy and labor market remain strong. Meanwhile, Chicago Fed President Austan Goolsbee said on Tuesday that the latest progress in inflation toward the Fed’s 2% inflation target will be faster than many people expect.

U.S. JOLTS job openings climbed to 8.14 million in May, from 7.91 million in April (revised to 8.05 million). The Bureau of Labor Statistics reported on Tuesday that the number exceeded the forecast of 7.91 million.

On the CAD side, Canadian manufacturing activity remained weak in June as new orders fell and companies laid off workers for the first time in five months. The Canadian S&P Global Manufacturing Purchasing Managers’ Index (PMI) remained stable at 49.3 in June, below the expected value of 50.2. The indicator has shrunk for the 14th consecutive month, the longest streak of contraction since October 2010.

Traders will be closely watching Canadian employment data on Friday. The unemployment rate is expected to rise to 6.3% in June, while the Canadian economy is expected to add 22,500 jobs in June.

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