The Canadian dollar weakened to 1.37 per USD from the one-month high of 1.36 on April 27th, following the Bank of Canada's decision to hold interest rates. The central bank kept its policy rate at 2.25% and stated that it does not expect the recent surge in energy prices to de-anchor inflation expectations, limiting the view of a potential hike this year. Meanwhile, the US dollar strengthened as markets increased exposure to safe-haven assets on no signs of de-escalation between the US and Iran. The US Federal Reserve is also set to announce its next move on interest rates today with expectations of a hold, mirroring the BoC's cautious approach as it weighs the threat of the Iran war to its economy against the potential for a surge in inflation.