USD/CAD clings to mild losses below 1.3570, awaits BoC’s decision, US CPI

USD/CAD seems to remain tepid amid firmer US Dollar (USD) and Crude oil prices. The pair inches lower to near 1.3570 during the Asian session on Wednesday. The US Dollar (USD) holds ground despite lower US Treasury yields.

Traders eagerly await the release of the Bank of Canada’s (BoC) interest rate decision, with expectations of remaining unchanged at 5.0%. Additionally, US Consumer Price Index (CPI) data and the FOMC Minutes are scheduled to be released later in the North American session.

Crude oil prices encountered hurdles that potentially weighed on the Canadian Dollar (CAD). The impasse in Gaza ceasefire negotiations revived concerns about the security of supplies from the Middle East, counteracting a larger-than-anticipated increase in US Crude inventories. West Texas Intermediate (WTI) oil price hovers around $84.70 per barrel, by the press time.

The US Dollar (USD) encounters challenges amid lower US Treasury yields. At the time of writing, the US Dollar Index (DXY) consolidates 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 stressed the importance of bringing the current inflation rate, hovering around 3%, back down to the target level of 2%.

Investors adopt a cautious stance, expecting 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 exceeds expectations.