CAD Strengthens Against USD as Oil Prices Rise Ahead of Fed Decision

The Canadian Dollar (CAD) strengthened modestly against the US Dollar (USD) on Wednesday due to a rebound in Oil prices. The West Texas Intermediate (WTI) price rose over 5% to around $83, supporting the CAD as Canada is a major crude exporter.

However, the broadly stronger US Dollar remains the main driver of the pair. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, rebounded from an intraday low of 101.24 to around 101.45.

The Federal Reserve (Fed) is expected to leave interest rates unchanged when it announces its policy decision at 18:00 GMT. Nevertheless, a rate hike cannot be ruled out, with the CME FedWatch Tool showing a 31% probability of a 25-basis-point increase.