USD/CAD trades with mild losses below 1.3950, US NFP data looms

• USD/CAD softens to near 1.3925 in Friday's early European session. 
• The uncertainty surrounding the US presidential election and geopolitical risks might help limit the USD's downside. 
• Economists support calls for another oversized rate cut from the BoC. 

The USD/CAD pair loses momentum to around 1.3925 during the early European trading hours on Friday. The weakening of the US Dollar (USD) drags the pair lower. Traders brace for the highly-anticipated US Nonfarm Payrolls (NFP) for October, which is due later on Friday. 

The Commerce Department report showed the US Personal Consumption Expenditures (PCE) Price Index, inflation by the Fed's targeted measure, increased  2.1% on a yearly basis in September, compared to 2.2% in August. This figure came in line with market expectations. 

The downside of the Greenback might be limited amid the uncertainty ahead of the US presidential election next week and the ongoing geopolitical tensions in the Middle East, boosting the safe-haven currency like the USD. However, the US October NFP report on Friday could provide cues about the Fed's interest rate outlook. Any signs of weakness in the US economy or labor market could prompt the bets of a jumbo Fed rate cut again, which might exert some selling pressure on the USD. 

On the Loonie front, the rising expectation that the Bank of Canada (BoC) could deliver a bigger rate cut again amid signs the economy stalled might contribute to the Canadian Dollar's (CAD) downside. Andrew Grantham, CIBC senior economist, said, "With growth once again appearing to fall short of their already downgraded forecast, we continue to forecast that policymakers will deliver another 50 bps cut at the December meeting."