USD/CAD continues to give back the advance from the previous month as fresh data prints coming out of the U.S. economy highlight a limited risk for above-target inflation, with the pair at risk for a further decline as Canada's Employment report is anticipated to show a 20.0K expansion in April. In contrast, the New Zealand dollar remains under pressure as the Reserve Bank of New Zealand (RBNZ) keeps the cash rate at the record-low of 1.75%, and NZD/USD appears to be on track to test the November-low (0.6780) as it extends the bearish sequence from earlier this week.

USD/CAD TUMBLES TO FRESH MONTHLY-LOW FOLLOWING LACKLUSTER U.S. CONSUMER PRICE INDEX (CPI)

USD/CAD slips to a fresh monthly-low (1.2743) as updates to the U.S. Consumer Price Index (CPI) dampen bets for four Fed rate-hikes in 2018, and the exchange rate stands at risk for further losses as it carves a fresh series of lower highs & lows.

Despite the uptick in the headline print, a deeper look at the report showed the core CPI holding steady at an annualized 2.1% for the second straight month in April, while growth in Real Average Hourly Earnings narrowed to 0.2% from a revised 0.3% in March.

Keep in mind, the recent developments should keep the Federal Open Market Committee (FOMC) on course to further normalize monetary policy as the central bank largely achieves its dual mandate, but the limited threat for above-target inflation may push Chairman Jerome Powell and Co. to tame bets for an extending hiking-cycle as ‘inflation on a 12-month basis is expected to run near the Committee's symmetric 2 percent objective over the medium term.'

With that said, attention now turns to Canada's Employment report, which is anticipated to show the economy adding 20.0K jobs in April, and a positive development may fuel the recent decline in USD/CAD as it puts pressure on the Bank of Canada (BoC) to deliver another rate-hike later this year.