• USD/CAD holds steady around 1.3500 in Friday’s early Asian session. 
• US ISM Services PMI came in stronger than expected, while private sector payrolls grew the smallest gain since 2021 in August.
• The US and Canadian employment reports will be the highlights on Friday. 

The USD/CAD pair trades on a flat note near 1.3500 during the early Asian session on Friday. The US Dollar Index (DXY) extends its decline to near the 101.00 psychological support level. Traders prefer to wait on the sidelines ahead of the key events on Friday. The US and Canadian employment reports will take center stage later in the day. 

Data released by Automatic Data Processing (ADP) on Thursday showed that private sector employment increased by 99,000 in August and annual pay was up 4.8% year-over-year. This figure followed the 111,000 (revised from 122,000) increase seen in July and below the estimation of 145,000 by a wide margin.

Meanwhile, the weekly US Initial Jobless Claims rose to 227,000, compared to the previous reading of 232,000 (revised from 231,000) and below the initial consensus of 231,000). On the positive side, US ISM Services PMI rose to 51.5 in August from 51.4 in July, above the market expectation of 51.1.

A rise in the US Unemployment Rate in July sparked fears of a looming recession in the United States and triggered the expectation of a larger rate cut by the Federal Reserve (Fed). The employment data will be released on Friday, including Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings. These reports could significantly influence the size and pace of the Fed’s easing cycle. Any signs of a weaker US labor market could exert some selling pressure on the Greenback in the near term.