USD/CAD Climbs Toward 1.38 as Soft CPI and Oil Weakness Hit CAD

USD/CAD has advanced to the 1.3750-1.3789 area, driven by softer-than-expected Canadian CPI that cut Bank of Canada tightening odds and reinforced Federal Reserve hawkishness. The pair broke above its 50-day moving average after hot US inflation prints, resilient US data, and weak April Canadian jobs widened the policy gap. Earlier oil-price gains from geopolitical tensions proved short-lived as renewed US-Iran peace hopes capped crude, allowing USD strength and firm Treasury yields to dominate. Scotiabank now sees scope for a move to 1.38-1.3815 on the persistent rate differential and loonie underperformance.