EUR/CAD edges higher above 1.6100 ahead of Canadian employment data

• EUR/CAD trades marginally higher around 1.6110 ahead of key Canadian labor market data for August.
• The Unemployment Rate is seen rising to 7%.
• Economists expect the ECB to hold interest rates steady in the policy meeting next week.

The EUR/CAD pair extends its winning streak for the third trading day on Friday, and trades marginally higher to near 1.6115 during the late Asian trading session. The pair ticks up ahead of the Canadian labor market data for August, which will be published at 12:30 GMT.

The Canadian labor market report is expected to show that employers hired 7.5K fresh workers. In July, the labor force was reduced 40.8K. The Unemployment Rate is estimated to have increased to 7%, the highest level seen since October 2021.

Signs of further slowdown in the Canadian job market would prompt market expectations for further interest rate cuts by the Bank of Canada (BoC). In last three monetary policy meetings, the BoC has kept interest rates steady at 2.75%.

In the September's policy meeting, the BoC is expected to cut interest rates by 25 basis points (bps) to 2.5%, according to a report from Reuters.

Meanwhile, the Euro (EUR) trades broadly calm as investors expect that the European Central Bank (ECB) is unlikely to cut interest rates in the monetary policy meeting next week. A Reuters poll on September 1-4 showed that almost all economists predicted that the ECB will not reduce interest rates in the September policy meeting. The report showed that inflation in the Eurozone economy  is almost in control and its economic outlook is steady.