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USD/CAD holds near 1.4100 as traders await the Fed decision
The pair is supported and pressured by oil price rebounds and Middle East escalation, which is also tied to renewed inflation and rate hike expectations.
FXStreet reported that USD/CAD is consolidating around 1.4100 during the Asian session as traders look ahead to a two-day FOMC meeting that is due later this Wednesday.
The outlet said the focus is on signals about the Fed’s future policy path, which is expected to drive near-term USD price action, while the dollar remains on the defensive below a one-month high reached on Tuesday.
FXStreet also pointed to a rebound in crude oil prices from an over two-week low as a headwind for USD/CAD, supporting the oil-linked Canadian dollar, while noting that geopolitical uncertainty can boost safe-haven demand for the US dollar.
The report tied the geopolitical backdrop to reports of Iranian strikes and a warning from President Donald Trump that the US would target Iranian infrastructure if a rapid diplomatic resolution does not follow, adding to crude oil strength and reviving inflation fears and bets for at least one interest rate hike by the Fed in 2026.
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