USD/CAD softens near 1.3650 on poor US inflation data, rising bets of Fed rate cut  

• USD/CAD remains weak near 1.3665 in Thursday's early Asian session. 
• US CPI inflation rose to 2.4% in May vs. 2.5% forecast. 
• Extended gains in Crude Oil prices support  WTI price. 

The USD/CAD pair remains on the defensive around 1.3665 during the early Asian session on Thursday. The US Dollar (USD) weakens against the Canadian Dollar (CAD) due to poor US inflation data and rising bets of a Federal Reserve (Fed) rate cut in September. The US Producer Price Index (PPI) will be the highlight later on Wednesday, seconded by weekly Initial Jobless Claims.

Data released by the US Bureau of Labor Statistics (BLS) on Wednesday showed that the US Consumer Price Index (CPI) rose 2.4% on a yearly basis in May, compared to 2.3% in April. This figure came in below the market consensus of 2.5%. 

Meanwhile, the core CPI, which excludes volatile food and energy prices, rose 2.8% YoYi n May, matching April's increase. On a monthly basis, the CPI and the core CPI both increased 0.1%, against analysts' estimate of 0.2% and 0.3%, respectively.

The Greenback came under selling pressure with the immediate reaction. Interest-rate swaps showed that traders see a 75% chance that the Fed will cut borrowing costs by September.  

Extended rise in Crude Oil prices might boost the commodity-linked Loonie. It's worth noting that Canada is the largest oil exporter to the US, and higher crude oil prices tend to have a positive impact on the CAD value.