USD/CAD edges higher on Wednesday, trading in the 1.3680s as the US Dollar (USD) firms up on commentary from several Federal Reserve (Fed) rate-setters, that overall suggests the US central bank is reluctant to cut its main interest rate, the Fed Funds rate, due to insufficient progress being made on lowering inflation. This is viewed as positive for the US Dollar (and USD/CAD), because keeping the Fed Funds rate high leads to greater foreign capital inflows, from investors seeking returns. Market gauges of the trajectory of Fed rate policy, however, are signaling a more optimistic roughly 66% probability of the Fed cutting interest rates at or before its September meeting. Estimates are based on the CME FedWatch tool, which uses the price of Interest Rate (Fed Funds) Futures for its calculations. USD/CAD’s rebound comes after a period of weakness for the pair during which investors revised their expectations of the path of Bank of Canada (BoC) monetary policy. From previously expecting the BoC to begin a cycle of interest rate cuts due to declining inflation in Canada they now see the BoC holding its policy rate at the current level – much like the Fed. The BoC cut their policy interest rate by 0.25% to 4.75% in June, however, the release of higher-than-expected inflation data for May, has now reduced expectations that they will make another cut at their next meeting in July, despite investors expecting one. This has led to an overall appreciation of the Canadian Dollar (CAD) and a decline in USD/CAD. From a technical perspective, over the short-to-medium term, USD/CAD is seesawing between losses and gains. After a false upside breakout from a Symmetrical Triangle pattern on June 7 it quickly ran out of steam and capitulated, falling back within the triangle. With neither bulls or bears in overall control, and a lack of directional trend, it is likely to continue in this sideways mode until it breaks decisively to one side or another.  USD/CAD Daily Chart More By This Author:USD/CAD Struggles For A Firm Intraday Direction, Flat Lines Around Mid-1.3600s WTI Sticks To Gains Near $81.00 Mark, Remains Below Two-Month High Set On Tuesday USD/JPY Consolidates Near Two-Month Top, Remains Below 160.00 Amid Risk Of Intervention