- USD/CAD remains muted in the initial Asian trading hours on Monday.
- Higher US Treasury yields capped the downside for the US dollar.
- The Canadian dollar capitalises on recent oil prices gains.
After testing the lower level below 1.2500 in the previous week, USD/CAD is trading cautiously on Monday.
At the time of writing, USD/CAD is trading at 1.2529, up 0.01% for the day.
The US Dollar Index (DXY), which tracks the performance of the greenback against the six major currencies, tracks below 92.20 with 0.23% losses after US Nonfarm payroll (NFP) data disappointed the market.
The NFP revealed US economy added 235k jobs in August, much below the market expectations of 750K. The huge gap weighed on the US dollar and dragged it lower below 92.00. The greenback managed to gain some ground following the positive Unemployment Rate, which declined to 5.2% from 5.4%.
On the other hand, the Canadian dollar pared some of its previous gains as oil prices fell from the highs of $70.00.
In addition to that Canadian Labor Productivity rose 0.6% in Q2, rebounding from the previous 1.7% decline in the previous quarter.
As for now, traders waiting for the Bank of Canada’s (BOC) interest rate decision later in the week.