Investing.com - The U.S. dollar edged higher against its Canadian counterpart on Wednesday, just off a 14-month trough ahead of the Federal Reserve’s monthly policy decision, although higher oil prices supported the Canadian currency.
USD/CAD hit 1.2502 during early U.S. trade, the session low; the pair subsequently consolidated at 1.2525, up 0.13%.
The pair was likely to find support at 1.2478, Tuesday’s low and a 14-month trough and resistance at 1.2553, Monday’s high.
Investors were hoping that the Fed’s rate statement, due later Wednesday, will reveal more about policy plans for the second half of the year, with markets paying close attention to details of when and how the Fed will start reducing its $4.5 trillion balance sheet.
Doubts over the Feds plans for a third rate hike this year have recently weighed on the greenback.
Investors also remained focused on the investigation into alleged links between U.S. President Donald Trump’s administration and Russia in last year’s election.
On Monday, Jared Kushner, Trump’s son-in-law and a senior White House adviser, told Senate investigators he had met with Russian officials four times last year but said he did not collude with Moscow.
Investors fear the persistent political turmoil will derail the Trump administration’s pro-growth economic agenda of tax cuts and infrastructure spending, which helped propel the dollar to 14-year peaks after the November election.
Meanwhile, the commodity-related Canadian dollar was boosted by a surge in oil prices on Wednesday, supported by fresh pledges from Saudi Arabia and Nigeria earlier in the week to respectively pull back on exports and output.
The loonie was steady against the euro, with EUR/CAD at 1.4574.