USD/CAD upside momentum builds as BoC rate cut odds diminish

USD/CAD advanced 0.6% to 1.4420 as diminishing Bank of Canada rate cut expectations and surprising economic data strengthened the case for further upside. Canadian inflation data came in higher than expected at 2.9%, while GDP growth surprised to the upside, reducing market expectations for aggressive BoC easing. The pair broke above key resistance at 1.4400, with technical indicators suggesting momentum toward 1.4500. Markets have significantly reduced rate cut pricing, with only 25 basis points of easing now expected over the next six months, compared to 50 basis points previously. The Canadian dollar's resilience faces tests from both domestic economic strength and external trade policy risks. Near-term support has formed at 1.4380, with a break below potentially signaling consolidation. Traders should monitor upcoming Canadian employment data and any developments in US-Canada trade relations for directional cues.