Since the focus has shifted to the Fed's policies and oil prices have increased, the USD/CAD has remained relatively stable at 1.2900

For now, the USD/CAD is struggling due to its inability to stay above the 1.2920 level. Selling pressure and a decrease in the asset are to be expected as investors await the Federal Reserve's interest rate announcement (Fed). The asset has been trading in a range of 1.2855 to 1.2937, but it showed strong recovery on Friday after maintaining its position around the weekly support level.

On Wednesday, the Federal Reserve (Fed) will declare its monetary policy, hence the US dollar index (DXY) is likely to remain quiet until after the Fed's announcement. Because of the ongoing damage to US households from rising prices, an announcement of a rate hike is expected soon. The scale of the same, though, will remain the primary worry. There is a good possibility that the Fed will implement a second rate hike of 75 basis points (bps).

There is no question that the financial community has not found a significant indication that may suggest that the pricing pressures have reached their limit, but slowdown indicators have intensified as Friday's PMI remained negative and big-name Wall Street earnings are not appealing to investors.

The loonie remained weak even after the release of Canada's Consumer Price Index (CPI). Total inflation for the year was 8.1%, which was up from 7.7% in the previous report but lower than the 8.4% forecast. There was also a rise of 10 basis points in the core CPI, which now stands at 6.20 percent rather than the previous edition's 6.10 percent.