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The Canadian dollar edged lower against its U.S. counterpart on Tuesday despite higher oil prices, as investors kept their powder dry ahead of a Federal Reserve U.S. rate decision and Canada’s monthly gross domestic product data this week.

At 3:53 p.m. (2053 GMT), the Canadian dollar was trading 0.1 per cent lower at 1.3281 to the greenback, or 75.30 U.S. cents. The currency, which on Monday touched its strongest intraday in more than two weeks at 1.3204, traded in a range of 1.3242 to 1.3285.

“It’s a lot noise and moves today are not really indicative of anything else,” said Mazen Issa, senior FX strategist at TD Securities. “It’s been a bit of a chop-fest, it’s the day before the Fed.”

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The Fed is expected on Wednesday to leave its key overnight lending rate in a range of 2.25 per cent to 2.50 per cent and to acknowledge growing risks to the U.S. economy as global momentum weakens.

Slower global growth could also hurt Canada’s economy and perhaps more so, because Canada is a major commodities producer.

Analysts expect Canadian GDP data for November, due on Thursday, to reveal a contraction in the economy.

The price of oil, one of Canada’s major exports, rallied after the United States imposed sanctions on state-owned Venezuelan oil company PDVSA, a move likely to reduce the OPEC member’s crude exports and relieve some global oversupply worries.

U.S. crude oil futures settled 2.5 per cent higher at $53.31 a barrel. Still, some in the oil industry worry that crude demand could stutter if the trade war between Washington and Beijing slows global economic growth.

Chinese telecommunications giant Huawei Technologies Co Ltd

Chief financial officer Meng Wanzhou appeared in a Canadian court on Tuesday for a hearing concerning her bail in a case that has strained Beijing’s ties with Canada and the United States.

Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries after data showing U.S. consumer confidence at its lowest since July 2017.

The two-year rose 4 Canadian cents to yield 1.854 per cent and the 10-year climbed 20 Canadian cents to yield 1.940 per cent.

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