On Wednesday, the Canadian dollar stabilized near a five-week low against the U.S. dollar, trading at 1.3750 CAD per USD, after earlier reaching 1.3778 CAD, its weakest level since April 15. This decline is attributed to a drop in oil prices and disappointing inflation data. The consumer price index (CPI) for Canada increased at an annual rate of 2.8% in April, falling short of the expected 3.1%, which has led analysts from Scotiabank, Shaun Osborne and Eric Theoret, to suggest that the Bank of Canada (BoC) may remain on the sidelines regarding interest rate hikes for now. However, they caution that rising global price pressures could soon affect Canada. The swap market reflects this sentiment, now pricing in about 40 basis points of tightening from the BoC this year, down from 54 basis points prior to the inflation report. Additionally, U.S. crude oil futures fell 6.5% to $97.35 per barrel, influenced by ongoing negotiations with Iran, which is significant as oil is a major export for Canada. Canadian bond yields also fell, with the 10-year yield down 12.4 basis points to 3.580%, continuing its pullback from a recent two-year high.