USD/CAD holds near 1.3960 in Wednesday’s European session, with the pair struggling to advance as the US Dollar (USD) remains under pressure. The Greenback softened after US President Donald Trump suggested that White House Economic Adviser Kevin Hassett could be a potential successor to Federal Reserve (Fed) Chair Jerome Powell when his term expires in May 2026.
At the time of writing, the US Dollar Index (DXY), which tracks the USD against a basket of six major currencies, is trading slightly lower around 99.10.
Uncertainty over fed leadership weighs on USD
On Tuesday, President Trump said he has narrowed the shortlist for the next Fed chair to a single candidate, to be announced in early 2026. His remarks included a nod to Hassett, saying, “I guess a potential Fed chair is here too… He’s a respected person, that I can tell you. Thank you, Kevin,” according to Reuters.
The hints around future Fed leadership have added uncertainty to the policy outlook, contributing to mild pressure on the USD.
Markets await us employment and services PMI
Investors are now focused on the November ADP Employment Change and the ISM Services PMI, due during the North American session. These releases will play a pivotal role in shaping expectations for the Fed’s next steps, as several officials – including Jerome Powell – have warned of rising downside risks in the labor market.
Canadian labor data in focus later this week
The Canadian Dollar (CAD) will take further direction from domestic labor market figures due on Friday. The unemployment rate is projected to rise to 7% in November, up from 6.9% in October, while the overall labor force is expected to remain broadly unchanged.
