The USD/CAD exchange rate remains stable on Tuesday morning as traders position themselves ahead of the Canadian consumer inflation data set to be released. Currently trading at 1.3960, the pair has increased by 1.50% from its lowest point this year.

Market sentiment hinges on the upcoming inflation data, which may provide insights into the Bank of Canada’s monetary policy direction. Traders are eager to see how inflation trends might affect future rate decisions, influencing the currency pair significantly.

As preparations for potential volatility include strategies anticipating different outcomes from the inflation report, USD/CAD traders should maintain an adaptive approach in their strategies to navigate these fluctuations effectively.