USD/CAD trades with modest losses below 1.3800 ahead of US/Canadian jobs report

• USD/CAD drifts lower on Friday as Fed rate cut bets continue to undermine the USD.
• Trade uncertainties and subdued Oil prices might keep a lid on gains for the Loonie.
• Traders now look forward to the crucial employment details from the US and Canada.

The USD/CAD pair extends the previous day's late pullback from the vicinity of mid-1.3800s, or an over one-week high, and attracts some follow through sellers on Friday. Spot prices, for now, seem to have snapped a four-day winning streak and currently trade just below the 1.3800 mark as traders keenly await the crucial monthly employment details.

The popularly known US Nonfarm Payrolls (NFP) report is due for release later during the North American session and will play an important role in influencing the near-term US Dollar (USD) price dynamics. This, along with Canadian monthly jobs data, should provide some meaningful impetus to the USD/CAD pair and produce short-term trading opportunities heading into the weekend.

In the meantime, the growing acceptance that the US central bank will lower borrowing costs in September and deliver at least two 25-basis-point rate cuts by the year-end keeps the USD bulls on the defensive. This, in turn, is seen as a key factor exerting some downward pressure on the USD/CAD pair. However, trade-related uncertainties might cap the upside for the Canadian Dollar (CAD).

In fact, US President Donald Trump has asked the Supreme Court for an immediate hearing in hopes of overturning an appeals court ruling that deemed most of his tariffs illegal. Furthermore, Trump said that his administration would impose tariffs on semiconductor imports from firms not moving production to the US, as it begins renegotiating the US-Mexico-Canada free trade deal.

Apart from this, subdued Crude Oil prices might hold back traders from placing aggressive bullish bets around the commodity-linked Loonie and contribute to limiting losses for the USD/CAD pair. Nevertheless, spot prices seem poised to register modest weekly gains and remain at the mercy of USD price dynamics.