• USD/CAD meets with a fresh supply on Wednesday amid a dovish Fed-inspired USD downtick.
• Bets for a larger BoC rate cut, retreating Oil prices to undermine the Loonie and lend support.
• Traders might also prefer to wait on the sidelines ahead of the crucial FOMC policy decision.

The USD/CAD pair attracts fresh sellers during the Asian session on Wednesday and currently trades below the 1.3600 mark, down less than 0.10% for the day. Spot prices, meanwhile, remain confined in a familiar range held over the past week or so as traders keenly await the key central bank event risk before positioning for the next leg of a directional move. 

The US Federal Reserve (Fed) is scheduled to announce its policy decision at the end of a two-day meeting later today and is universally expected to start its rate-cutting cycle. Apart from this, the market focus will be on the upbeat economic projections, including the so-called 'dot plot', which will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide some meaningful impetus to the USD/CAD pair. 

In the meantime, rising bets for an oversized, 50 basis points (bps) interest rate cut by the Fed overshadow Tuesday's upbeat US Retail Sales and cap the USD recovery from its lowest level since July 2023, which, in turn, is seen weighing on the USD/CAD pair. An unexpected rise in the US Retail Sales eased concerns about a broader economic slowdown, though the market reaction turned out to be short-lived amid dovish Fed expectations.