Elsewhere, the US Dollar Index (DXY) extends the previous day’s losses towards 102.00 as the Federal Reserve (Fed) officials hint at softer inflation and weigh on the market’s bets of the US central bank’s 0.25% rate hike in May. That said, Minneapolis Fed President Neel Kashkari mentioned that he is less optimistic than the bond market on the speed of inflation's fall. However, Philadelphia Fed President Patrick Harker and New York Fed President John Williams previously signaled to ease inflation pressure and weighed on the market’s bets of the Fed’s 0.25% rate hike in May. With this, the CME’s FedWatch Tool suggests a 69.5% chance of the US central bank's hawkish action in the next monetary policy meeting versus 71.2% marked the previous day.

It should be noted that the International Monetary Fund’s (IMF) downward revision to the global growth forecasts and Friday’s upbeat US jobs report, as well as hopes of BoC’s inaction, keeps the USD/CAD buyers hopeful.

Amid these plays, S&P 500 Futures remain directionless around 4,138 after a mixed Wall Street close. Further, the US Treasury bond yields grind higher and prod the US Dollar sellers. That said, the US 10-year and two-year Treasury bond yields grind higher around 3.44% and 4.05% during a four-day and five-day uptrend respectively.

Looking ahead, USD/CAD traders should closely observe the BoC statement as the Canadian central bank has already signalled its hesitance in increasing the benchmark rates. Should the policymakers sound dovish, the Loonie pair may recovery faster as the Oil price has recently signalled bullish exhaustion.