The USD/CAD pair falls vertically after a short-lived pullback to near 1.3850 in the European session. The Loonie asset faces an intense sell-off as the US Dollar extends downside on expectations that the Federal Reserve (Fed) is done with hiking interest rates for now. S&P500 futures generated significant gains in the London session, portraying a decent improvement in the risk appetite of the market participants. US equities were heavily bought on Wednesday as the Fed kept interest rates unchanged in the range of 5.25-5.50%. Fed Chair Jerome Powell kept expectations of further policy-tightening alive as the US economy is resilient due to robust consumer spending and tight labor market conditions.
The US Dollar Index (DXY) has extended its downside to near 106.16 after a gap-down opening, weighed down by steady Fed policy and surprisingly lower ISM Manufacturing PMI for October. The US ISM reported that factory activities fell to 46.7 against expectations and the former release of 49.0. Contrary, the S&P Global survey of private factories showed that the Manufacturing PMI met the 50.0 threshold in October. Meanwhile, investors await the US Nonfarm Payrolls (NFP) data, which will be published on Friday. As per expectations, US employers hired 180K job seekers in October. On the Canadian Dollar front, the Employment data for October will be keenly watched, which will be released on Friday. The Unemployment Rate is seen rising to 5.6% while 22.5K new labor joining are expected.
