• The Dollar remains pinned near 1.3930 lows against the Loonie.
• Canada's employment figures are expected to show that the jobless rate increased in November.
• In the US, PCE Price Index figures are likely to confirm that inflation remains well above the Fed's target.

The US Dollar remains pinned near monthly lows at 1.3930 on Friday, on track to a 0.2% weekly decline, following another 0.9% drop in the previous week, with all eyes on Canada’s employment figures and the US Personal Consumption Expenditures (PCE) Prices Index releases, due later today.

Recent US employment data has strengthened the case for a Fed rate cut next week. The ADP Employment report showed an unexpected decline in net jobs in November, and the Challenger Job cuts revealed a sharp decrease in layoffs last month, but it also said that US businesses have frozen their hiring plans amid the uncertain economic context.

On the positive side, US Initial Jobless Claims declined to a three-year low of 191,000 in the last week of November, although the data was taken with caution, on the assumption that the Thanksgiving holiday might have distorted the real figures.

Canada's Unemployment Rate is expected to have increased

The Canadian calendar has been light this week, and investors are focusing on November’s employment figures. Net employment is expected to have declined by 5,000 in November, following a 66,600 increase in October, and the unemployment rate is seen ticking up to 7%, from 6.9% in the previous month.

These figures, however, are unlikely to change the view that the Bank of Canada (BoC) will keep interest rates unchanged next week, after two consecutive rate cuts in September and October.

In the US, the Personal Consumption Expenditures (PCE) Price Index is expected to confirm that inflation remains sticky at levels above the Fed’s target rate. PCE inflation index is seen accelerating to a 2.9% yearly rate in November, from 2.8% in October, while the Core CPI is seen growing steadily, at a 2.9% Y-o-Y rate. Likewise, these figures are unlikely to alter the view that the Fed will cut interest rates by a quarter point next week.