Headline Canadian inflation was strong and that's what the market is focused on along with a better risk tone. It ignores that core Canadian inflation was on the soft side and that the BOC may have to ease if global demand falters or if the rail protests in Canada continued for an extended period.
The weakness in USD/CAD is in stark contrast to the struggling Australian dollar, which is down today and just above 10-year lows.
The loonie, meanwhile, is comfortably in the range of the past year after posting a double dop at 1.3328 earlier this month.
It's a strange divergence because (to me at least) coronavirus is a binary outcome: It either fades in a couple months or becomes a global pandemic. If it's the latter, CAD is in a worse spot that AUD if only because the BOC has more room to ease and more room to fall.