Oil has found a bid in a quick rise to $98.52 from $96.00 an hour ago but crude and the Canadian dollar have disconnected recently. Instead, it's the CPI report that weighed on USD/CAD, nudging the pair to 1.2690 from 1.2705.
Canadian CPI rose 5.7% y/y, a faster pace than 5.1% previously and 5.5% expected. Core measures were also higher than the consensus.
The Bank of Canada next meets on April 13 and a 50 basis point hike can't be ruled out but the BOC may be more inclined to lean on quantitative tightening initially.
In the bigger picture, USD/CAD has been range bound. The pair hit a one-week low after the CPI data but is still 100 pips away from the March low.
From here, I suspect the overall path of risk sentiment will be the driver. Even if equities can flatten out, the loonie should slowly benefit from high commodity prices and rising rates.
For today though, it's going to be all about the USD side of the equation with the Fed decision coming up at 2 pm ET.
