USD/CAD trades flat below 1.3750 as traders await nominations for next Fed Chair

• USD/CAD trades on a flat note around 1.3740 in Thursday's early Asian session.
• Increased expectations of a Fed rate cut might weigh on the US Dollar. 
• Traders will closely monitor the nominations for the next Fed Chair. 

The USD/CAD pair holds steady near 1.3740 during the early Asian session on Thursday. Investors remain cautious about US President Trump's plans for Chief Jerome Powell's replacement and further developments on tariffs ahead of the upcoming deadline. The US weekly Initial Jobless Claims and Canada's Ivey Purchasing Managers Index (PMI) report will be released later on Thursday.

Traders raise their bets that the US Federal Reserve (Fed) will reduce the interest rates more times than previously expected this year after weaker-than-expected US jobs data for July, which might weigh on the US Dollar (USD). Fed funds futures traders are now pricing in a nearly 95% chance of a 25 basis point (bps) cut at the September meeting, up from 48% a week ago, according to the CME FedWatch tool. Traders see 62 bps in reductions this year.

In the absence of top-tier US economic releases on Thursday, traders will keep an eye on the developments surrounding nominations for the next Fed Chair. Trump said on Tuesday that he has narrowed the field of potential future Fed chairs to four candidates, a list that does not include US Treasury Secretary Scott Bessent. Additionally, Trump noted that he will name a replacement for Fed Governor Adriana Kugler by the end of the week.

Meanwhile, a decline in crude oil prices due to rising OPEC+ supply and worries of weaker global demand might undermine the commodity-linked Loonie and cap the downside for the pair.  It's worth noting that Canada is the largest oil exporter to the US, and lower crude oil prices tend to have a negative impact on the CAD value.