Ella 
During early European trading on Monday, USD/CAD recovered some of its losses near 1.3680. Meanwhile, the U.S. Dollar Index (DXY) remains positive around 105.30 ahead of key U.S. economic data. The final reading of the U.S. Consumer Price Index (CPI) is due out on Wednesday and is expected to increase by 3.4% year-on-year in April, compared with a 3.5% annual increase in March.
U.S. Federal Reserve officials said they are waiting for evidence that inflation is on a downward trajectory before the central bank considers cutting the federal funds rate from a 23-year high. Dallas Fed President Lorie Logan said it was unclear whether monetary policy would be tight enough to bring inflation down to the 2% target and that it was too early to cut interest rates.
In addition, San Francisco Fed President Mary Daly emphasized that achieving the Fed’s inflation target requires long-term restrictive policies. Minneapolis Fed President Neel Kashkari said he was in “wait-and-see mode” and the bar for concluding that interest rates needed to be raised to cool inflation was “high.” The cautious attitude of Federal Reserve officials provided some support for the US dollar against the Canadian dollar and became a “tailwind” for the US dollar against the Canadian dollar currency pair.
On the other hand, the Canadian economy added 90,000 jobs in April, its strongest growth in 15 months and beating expectations for 20,000 jobs, according to Statistics Canada. Additionally, the unemployment rate remained at 6.1% in April. The resilience of the labor market gives the Bank of Canada more time to wait to ensure inflation is sustained. However, falling crude oil prices put some selling pressure on Looney, as Canada is a major exporter of oil to the United States.
