USD/CAD struggles for a firm intraday direction, flat lines around mid-1.3600s

• USD/CAD oscillates in a range on Wednesday amid a mixed fundamental backdrop.
• Hotter Canadian CPI on Tuesday and an uptick in Oil prices underpin the Loonie.
• The Fed rate-cut uncertainty caps the USD and acts as a headwind for the major.

The USD/CAD pair struggles to capitalize on the previous day's late rebound from the 1.3620-1.3615 region, or a three-week low and remains on the defensive during the Asian session on Wednesday. Spot prices currently trade around mid-1.3600s, nearly unchanged for the day, and the mixed fundamental backdrop warrants some caution for aggressive traders ahead of the key US macro data.

The final US Q1 GDP print is due for release on Thursday, which will be followed by the Personal Consumption Expenditures (PCE) Price Index on Friday. The latter is considered the Federal Reserve’s (Fed) preferred inflation gauge and will play a key role in influencing market expectations about future policy decisions. This, in turn, will drive the US Dollar (USD) demand and provide some meaningful impetus to the USD/CAD pair. 

In the meantime, the uncertainty over the likely timing of when the Fed will start its rate-cutting cycle fails to assist the US Dollar (USD) in attracting buyers. The recent hawkish comments by influential FOMC members suggested that the US central bank will not be in a rush to start lowering borrowing costs anytime soon. That said, signs of moderating inflationary pressures keep hopes alive for a September Fed rate cut move and cap the USD. 

Meanwhile, an upward surge in Canadian consumer inflation in May forced investors to scale back their bets for a July rate cut by the Bank of Canada (BoC). This, along with an uptick in Crude Oil prices, underpins the commodity-linked Loonie and might further contribute to capping the USD/CAD pair. Hence, any attempted positive move is more likely to attract fresh sellers at higher levels and runs the risk of fizzling out rather quickly.