• USD/CAD extends losses for a sixth straight day as the Greenback stays under pressure on US-Iran peace talk prospects.
• Canadian inflation rose in March but came in below forecasts, with headline CPI up 0.9% MoM and 2.4% YoY.
• Investors eye US-Iran talks as the current two‑week truce expires Wednesday.

USD/CAD edges lower on Monday, trimming earlier gains as shifting geopolitical headlines keep volatility elevated across FX markets, while traders also digested the latest Canadian inflation data. At the time of writing, the pair is trading around 1.3663, easing from an intraday high near 1.3709.

The pullback comes as the US Dollar (USD) softens after opening the week with a bullish gap. Tensions escalated over the weekend after Iran once again closed the Strait of Hormuz, citing ceasefire violations linked to the ongoing US naval blockade. However, emerging signs of a diplomatic push, reportedly led by Pakistan, are helping to temper risk sentiment and weigh on the Greenback, lending support to the Canadian Dollar (CAD).

On the data front, inflation in Canada accelerated sharply in March, largely driven by higher energy prices. Data released by Statistics Canada showed the Consumer Price Index (CPI) rose 0.9% MoM, up from 0.5% in February but below market expectations of 1.1%. On an annual basis, CPI climbed to 2.4%, up from 1.8% previously, though still slightly below the 2.5% forecast.

The Bank of Canada’s (BoC) preferred core inflation measures showed a mixed picture in March. Core CPI rose 0.2% MoM, easing from 0.4% in February, while the annual rate ticked up to 2.5% from 2.3%.

The latest inflation data reinforces expectations that the BoC will maintain a cautious stance heading into its upcoming meeting later this month. RBC Economics said in a report that the BoC will keep a close eye on inflation expectations, but slower core price growth gives the central bank flexibility to also focus on what remains a soft economic backdrop, with the unemployment rate still elevated.

Recent remarks from BoC officials also suggest the central bank is willing to look through the initial inflationary shock, provided longer-term inflation expectations remain well anchored.

Looking ahead, investors will closely monitor US-Iran developments, particularly the potential reopening of the Strait of Hormuz in a possible second round of peace talks expected this week, as the current two‑week ceasefire is set to expire on Wednesday.

US President Donald Trump said it is “highly unlikely” he will extend the ceasefire with Iran and added that the Strait of Hormuz will not be reopened until a deal is signed. Trump also said that he is willing to meet with senior Iranian leaders if a breakthrough is reached.