USD/CAD remains confined in a range around 1.3600, eyes on US NFP, Canadian GDP

• USD/CAD oscillates in a narrow trading range between 1.3570-1.3610.
• Investors digest the Jackson Hole Symposium ahead of the key US labor and economic data.
• All eyes are on the Canadian annual GDP, US Nonfarm Payrolls.

The USD/CAD pair trades sideways around 1.3600 during the early Asian session on Tuesday. The US Dollar Index (DXY struggles to find a decisive direction and hovers around 104.00. Market participants await the US economic data and Canadian growth numbers for fresh impetus. The closely watched event this week will be the US Nonfarm Payroll due on Friday and it could trigger volatility in the market.

Investors digest the Jackson Hole Symposium and shift their focus to the US economic data. That said, Chairman Jerome Powell opened the door for an additional rate hike if required. However, it would be determined by incoming data. The market discounts modest odds of a hike in September, but the probability of a 25 basis point (bps) hike in November increased to nearly 70%, according to World Interest Rates Probabilities (WIRP). On Monday, the Federal Reserve Bank of Dallas revealed that the Manufacturing Index for August rose to -17.2 from -20 prior, better than the -21.6 expected.

On the Canadian Dollar front, a decline in oil prices weakens the Loonie as Canada is the largest exporter of crude to the US. Nevertheless, the positive development from China, the major oil importer in the world might lift the Loonie against its rivals. That said, Chinese authorities would reduce the 0.1% duty on stock trading to stimulate the capital market and strengthen investor confidence.

Last week, monthly Canadian Retail Sales for June expanded by 0.1% from the previous month. The figure came in better than the expectation of 0%. Market players will take cues from the Canadian annual Gross Domestic Product (GDP) on Friday. The weaker-than-expected growth number would convince the Bank of Canada (BoC) to maintain the interest rates unchanged at 5%.

Looking ahead, traders will keep an eye on the Canadian annual GDP for the second quarter. The growth number is expected to expand by 1.2%. On the US docket, market players will monitor the US Nonfarm Payrolls due on Friday. The market anticipated that the US economy would create more than 170K jobs in August. Traders will take cues and find trading opportunities around the USD/CAD pair.