Rebounding crude prices near $83 bolster the CAD, offsetting Fed rate hike bets ahead of today’s policy decision.
The Canadian Dollar edges higher against the US Dollar, with USD/CAD trading near 1.4093 as rising Oil prices provide support. West Texas Intermediate (WTI) climbs over 5% to around $83, driven by escalating Middle East tensions after US military threats against Iran.
The Loonie’s gains remain limited as the US Dollar Index (DXY) rebounds to 101.45, recovering from an intraday low of 101.24. Markets weigh diverging monetary policy expectations, with a 31% chance of a Fed rate hike later today, while the Bank of Canada is seen as less likely to tighten further.
Traders await the Fed’s 18:00 GMT decision, where rates are widely expected to remain unchanged, though a 25-basis-point increase remains possible.