The Canadian dollar depreciated versus the U.S. dollar ahead of the release of the U.S. non farm payrolls (NFP) report. The USD advanced across the board as the probability of a rate hike in December rose to over 60 percent. The Canadian dollar did not fall further thanks to the advance of the price of oil that is still rallying after the news of an Organization of the Petroleum Exporting Countries (OPEC) production cut agreement last week. The Canadian currency is bracing itself for a strong NFP report and a more subdued showing from the statistics Canada job numbers. The loonie has decoupled from the price of energy and is now showing a higher correlation to interest rate expectations. The lack of traction in the Canadian economy despite two rate cuts by the Bank of Canada (BoC) in 2015 and a fiscal stimulus package by the government in March of this year means that both will have to go back to the drawing board to spark a recovery. The BoC is not expected to cut rates this year, specially if the Fed hikes rates widening the interest rate differential but would be in a tough spot if the Fed is forced by an underperforming U.S. economy to stand pat for all of 2016. U.S. employment data has been positive all week. The ADP private payrolls added 154,000 jobs around 12,000 less than expected in September. The miss was not massive enough to warrant USD weakness and was balanced against a strong ISM non-manufacturing PMI that posted a 57.1 reading. The strong rebound in the non-manufacturing sectors was across the board as nearly all subcomponents showed an increase with the employment component rising 6.5 points which could signal a positive U.S. non farm payrolls (NFP) number.