Learn how KnightsbridgeFX can help you save up to 2% when buying or selling US dollars compared to your Canadian bank’s rates – click here to compare bank rates- US April CPI forecast 5.0% and Core-CPI forecast 5.5% y/y.- Fed Williams does not expect a rate cut in 2023.- US dollar opens with little change after quiet overnight session.USDCAD snapshot: open 1.3390-94, overnight range 1.3372-1.3396, close 1.3384, WTI $72.62, Gold $2029.55The Canadian dollar rally drifted aimlessly in a quiet overnight session with FX traders content to sit on the sidelines until today’s release of the US April inflation data.Headline April CPI is expected at 5.0% y/y, unchanged from March while Core-CPI ticks down to 5.5% from 5.6% y/y. Volatility will spike with any forecast deviation.A higher than expected Core-CPI rate will lead to renewed talk that the Fed will hike rates again in June, and recession fears, while downgrading 2023 rate cut hopes. The US dollar will rally, and stocks and commodity prices will fall.A lower-than-expected result will reignite “soft-landing” talk and reinforce the outlook for 2023 rate cuts. The US dollar will sink, recession fears will dissipate, and stocks will rally.If CPI is as expected, traders will find excuses for rate hike or rate cut arguments with nothing resolved.It is a slow news day which means the US debt ceiling talks get far more attention then they warrant. So far, no progress. Even so, it is a relatively safe bet that an agreement will be reached before the US defaults on debt. It has never happened.EURUSD traded defensively, falling from 1.0982 to 1.0947 due to position adjustments ahead of the US data. Traders are short US dollars/long EUR. Traders ignored German CPI data which at 7.2% y/y was unchanged from the provisional data.GBPUSD traded in a 1.2612-1.2643 range. Prices are supported by hopes for a tame US CPI reading, and a hawkish outcome to Thursday’s Bank of England monetary policy meeting. GBPUSD is vulnerable to the BoE pushing back against expectations for further rate hikes. A break below 1.2570 will extend losses to 1.2440.USDJPY chopped around in a 135.07-135.46 range. Prices are supported by modestly higher US Treasury yields and by the BoJ reiterating a dovish monetary policy outlook earlier this week.AUDUSD traded between 0.6751-0.6773 due to modest, but broad US dollar demand. The intraday technicals are bullish above 0.6720.