USD Soars as Fed Rate Hike Bets Offset Oil Gains Ahead of FOMC Decision

The Canadian Dollar has been trading near its two-week low against the US Dollar due to the strong bullish sentiment surrounding the Greenback. This is attributed to growing expectations of a 25-basis-point interest rate hike by the Federal Reserve at its upcoming policy meeting, which begins today and concludes tomorrow.

The FOMC decision will also provide insight into the future monetary policy path, which could further boost the USD's appeal. The Canadian Dollar, on the other hand, is facing downward pressure due to the anticipated dovish stance from the Bank of Canada and escalating trade tensions between the US and Canada.

Despite higher oil prices, which typically support the Loonie, sustained strength above a significant technical barrier at the 100-day Simple Moving Average (SMA) is needed for the USD/CAD pair to make further gains. The pair's price action remains mildly bearish, with support emerging at 1.3856.