The US Dollar continues to face downward pressure, struggling to make significant gains above the 1.3400 level. The Canadian Dollar is benefiting from the recent rebound in oil prices, and market attention is now focused on the upcoming release of Canadian consumer inflation data scheduled for Tuesday.

The surge in oil prices is driven by concerns about potential disruptions in the oil supply. British Petroleum (BP) has decided to prevent an oil tanker from crossing the Red Sea following reports of an explosion near a Yemeni harbour. This move comes in the wake of previous attacks on commercial vessels by Houthi militias, raising fears of disruptions in the oil supply and contributing to the upward push in prices.

While the economic calendar is relatively light for the day, investors are eagerly anticipating Tuesday’s release of Canada’s Consumer Price Index (CPI), which is expected to show a year-on-year easing below 3%. These figures will offer insights into the Bank of Canada’s (BoC) potential monetary policy adjustments, setting the tone for the currency pair’s direction. Looking ahead, Thursday brings the release of US GDP data, followed by Friday’s US Personal Consumption Expenditures (PCE) Prices Index, both of which could further influence the pair.