The U.S. dollar declined against its Canadian counterpart on Wednesday, as sentiment on the greenback remained fragile ahead of the Federal Reserve’s monthly policy statement due later in the day, while climbing oil prices boosted demand for the commodity-related Canadian currency.
Later Wednesday, the U.S. central bank was widely expected to leave interest rates on hold, but it was also likely to announce plans to trim its $4.2 trillion in bond holdings.
Markets were also jittery amid potentially higher tensions between the U.S. and North Korea following hawkish statements from U.S. President Donald Trump.
In his first speech before the United Nations General Assembly on Tuesday, Trump said”the United States has great strength and patience, but if it is forced to defend itself and its allies, we will have no choice but to totally destroy North Korea.”
Meanwhile, the Canadian dollar benefited from a sustained rise in oil prices, as traders eyed the weekly report on U.S. stockpiles.