Canadian Dollar continues to pare recent gains, falls back further on Wednesday.

• The Canadian Dollar shed another 0.2% on Wednesday as the Loonie shrivels.
• Canada saw a data-light day on the calendar, market flows continue to tilt toward the Greenback.
• US jobs data cooled, keeping investor sentiment tepid.

The Canadian Dollar (CAD) shed another one-fifth of one percent on Wednesday as the Loonie continues to flub chances for a technical recovery from multi-year lows against the US Dollar. CAD flows remains subdued, and the Loonie is backsliding into near-term congestion against the Greenback.

Canada was largely absent from the economic data docket on Wednesday as markets broadly focus on US jobs data, with the ADP Employment Change for December easing more than expected in December and serving as a tepid preview of Friday's upcoming US Nonfarm Payrolls (NFP) report.

Daily digest market movers: US jobs data bodes poorly for the Loonie as risk sentiment weighs

• A clear lack of Canadian economic data keeps market flows decidedly in the Greenback's court.
• US ADP job gains shrank to 122K in December, below the expected 140K. Slowing US jobs growth could put a hamper on investor sentiment as signs of economic softening risk blowing past rate cutting territory directly into the recession zone.
• The Fed's latest Meeting Minutes revealed Fed policymakers are pumping the brakes on further rate cuts due in no small part to incoming US President Donald Trump's plans to unilaterally apply steep tariffs to all of the US' main allies and trading partners in an effort to fund his scattershot government policy plans.
• In the face of a volatile new chapter in US-Canadian relations, Canadian Prime Minister Justin Trudeau has vacated his position, leaving Canadian parliament prorogued until the end of March as Canadian politicians select a new leader from the Canadian Liberal Party.
• Canadian employment and labor figures are due on Friday, but market reactions will be eclipsed by the US' latest Nonfarm Payrolls (NFP) jobs data dump.

Canadian Dollar price forecast

The Canadian Dollar (CAD) continues to recede against the US Dollar as Loonie traders struggle to find reasons to hit the buy button. USD/CAD has been caught in rough sideways churn since the Loonie fell to multi-year lows against the Greenback in mid-December, bolstering the USD/CAD pair to its highest bids since the pandemic.

Despite a near-term freeze in momentum, the pair is still leaning firmly into bull country, though buyers are struggling to finish the journey to the 1.4500 handle. The 1.4400 level is proving to be the barrier to beat, and Loonie bidders could force the pair back down to the 50-day Exponential Moving Average (EMA) which is rising into 1.4200.

USD/CAD daily chart