Forex Today: Eyes on BoC rate decision and US employment data

Here is what you need to know on Wednesday, December 6:

The US Dollar (USD) outperformed its rivals for the second consecutive day on Tuesday, with the USD Index climbing to its highest level in nearly two weeks. As investors await ADP Employment Change data for November, the USD Index consolidates its weekly gains near 104.00. The US economic docket will also feature Goods Trade Balance for October and Unit Labor Costs for the third quarter. The Bank of Canada (BoC) will announce its interest rate decision in the second half of the day.

The data from the US showed on Tuesday that the business activity in the service sector expanded at a stronger pace than expected in November. In October, the number of job opening declined to 8.7 million from 9.35 million in September. Although the mixed data limited the USD's gains in the early American session, the cautious market mood helped the currency gather strength before the end of the day.

In the meantime, the credit rating agency Moody's cut its outlook on China’s sovereign credit rating to 'negative' from 'stable' on Tuesday, citing the increasing risks to growth and a property sector crisis in the world’s second-largest economy, per Reuters. 

EUR/USD failed to shake off the bearish pressure and closed the fifth consecutive day in negative territory on Tuesday. The pair stays on the back foot early Wednesday and trades below 1.0800. Eurostat will release Retail Sales data for October later in the session.

USD/CAD advanced to the 1.3600 area on Tuesday but lost its traction early Wednesday. The BoC is widely expected to leave the policy rate unchanged at 5%.

GBP/USD registered losses on Tuesday but managed to stabilize at around 1.2600 early Wednesday. The Bank of England's (BoE) Financial Policy Committee will release a statement following its latest meeting. 

Bank of Japan (BOJ) Deputy Governor Ryozo Himino said on Wednesday that he doesn’t have any preset schedule in mind for exiting from the easy monetary policy. USD/JPY edged slightly lower following these comments and was last seen fluctuating in a narrow channel at around 147.00.

Gold extended its downward correction following Monday's volatile action and declined to the $2,010 area on Tuesday. XAU/USD gained traction early Wednesday and was last seen trading in positive territory at around $2,030.