Ella 
USD/CAD ended its five-day winning streak in Asia on Wednesday, trading around 1.3820. A mild pullback in the U.S. dollar has put downward pressure on the USD/CAD pair. However, weaker crude oil prices could put pressure on the Canadian dollar (CAD), limiting USD/CAD losses.
Canada’s latest inflation data provided support for the Bank of Canada (BOC) to consider easing lending conditions at its June meeting, as core inflation, which is closely monitored by markets, showed signs of continued easing.
The consumer price index (CPI) increased at a monthly rate of 0.6% in March, slightly lower than the expected value of 0.7%, but higher than the previous value of 0.3%. The consumer price index rose at an annual rate of 2.9%, compared with the previous reading of 2.8%. At the same time, the annual core inflation rate increased by 2.0%, which was slower than the previous increase of 2.1%. Core inflation rose 0.5% monthly, up from 0.1% in the previous month.
On the other hand, hawkish comments from Federal Reserve (FED) officials and an influx of safe-haven funds may boost the US dollar (USD) and potentially limit the downside for USD/CAD. The U.S. dollar index (DXY) retreated from a five-month high of 106.51 hit on Tuesday. This pullback may be due to a slight decline in U.S. Treasury yields.
