Anna 
During the Asian session on Wednesday, the USD/CAD pair exhibited a subdued performance, hovering near 1.3570, despite a stronger US Dollar (USD) and elevated crude oil prices. The USD maintained its strength despite lower US Treasury yields.
Market participants are eagerly anticipating the Bank of Canada’s (BoC) interest rate decision, widely expected to remain unchanged at 5.0%. Additionally, focus will be on the release of US Consumer Price Index (CPI) data and the Federal Open Market Committee (FOMC) Minutes later in the North American session.
Crude oil prices faced obstacles that may have weighed on the Canadian Dollar (CAD). Concerns about the security of supplies from the Middle East resurfaced due to an impasse in Gaza ceasefire negotiations, counteracting the impact of a larger-than-anticipated increase in US Crude inventories. West Texas Intermediate (WTI) oil price hovered around $84.70 per barrel at the time of writing.
Challenges persisted for the US Dollar (USD) amid lower US Treasury yields. The US Dollar Index (DXY) consolidated around 104.10, with 2-year and 10-year yields on US Treasury bonds at 4.73% and 4.35%, respectively.
Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari reiterated the central bank’s commitment to combatting inflation. Kashkari emphasized the importance of reducing the current inflation rate, which hovers around 3%, back to the target level of 2%.
Investors remain cautious, anticipating potential policy shifts influenced by incoming data. Strong labor market figures from last week could lead to a more hawkish stance from the Federal Reserve if inflation surpasses expectations.
