Both the Fed and the BoC reduced interest rates by 25 bps on Wednesday amid slowing job demand.

The USD/CAD pair gives up its early gains and flattens around 1.3775 during the European trading session on Thursday. The Loonie pair falls back as the US Dollar (USD) struggles to extend its Wednesday's recovery move amid caution ahead of the United States (US) Initial Jobless Claims data for the week ending September 12, which will be published at 12:30 GMT.

During European trading hours, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades 0.1% down near 96.90. Earlier in the day, the DXY extended Wednesday's recovery move to near 97.30.

Economists expect the number of individuals claiming jobless benefits for the first time to come in lower at 240K against the prior release of 263K. This was the highest reading seen in four years, which fuelled Federal Reserve (Fed) dovish expectations.

On Wednesday, the USD Index bounced back strongly from its fresh three-year low of 96.20 after the Fed's monetary policy announcement, in which it reduced interest rates by 25 basis points (bps) to 4.00%-4.25%. The Fed stated that the monetary policy adjustment was appropriate as the job market doesn't appear to be solid anymore.

Meanwhile, the Bank of Canada (BoC) also reduced interest rates by 25 bps to 2.5%, as expected, on Wednesday, and keeps the door open for further monetary policy easing amid weakness in the job market and a sharp decline in exports, while inflation remains well around the 2% target.