USD/CAD flat lines below 1.3650, eyes on FOMC Minutes

• USD/CAD holds steady near 1.3645 in Wednesday's early Asian session. 
• Fed officials emphasized another gradual rate cut may be appropriate.
• Lower crude oil prices might exert some selling pressure on the Loonie. 

The USD/CAD pair trades flat around 1.3645 amid the consolidation of the Greenback during the early Asian session on Wednesday. The US Federal Reserve (Fed) has emphasized that its approach to monetary policy easing will be guided by incoming economic data. Investors will take more cues from the US Consumer Price Index (CPI) data, which is due on Thursday. 

Fed officials remain cautious and suggest another gradual rate cut may be appropriate. Boston Fed president Susan Collins noted on Tuesday that the central bank will likely need to cut interest rates further and the next phase of policy should focus on preserving the US economy.

Meanwhile, Atlanta Fed President Raphael Bostic stated on Tuesday that the jobs market is not showing signs of weakness, adding that despite significant progress on inflation, overall price figures have not yet hit target levels. New York Fed president John Williams said he strongly supported a reduction of 50 basis points (bps) at the last meeting and that two additional 25 bps cuts this year would be a "pretty reasonable representation of a base case."

Investors will monitor the September's Federal Open Market Committee (FOMC) meeting later on Wednesday, which might offer some hints about the size of rate reductions in November meetings. "Markets are all over the place. In the last 15 days, the probability of a 50 basis point cut in November has gone from over 60% to zero. November is next month," noted El-Erian, the president of Queens' College. The prospect of a smaller rate cut might boost the US Dollar (USD) against the Canadian Dollar (CAD). 

On the other hand, a fall in crude oil prices could weigh on the commodity-linked CAD. Traders were disappointed as China's top economic planner ended a highly anticipated briefing on Tuesday without new stimulus measures. It's worth noting that Canada is the largest oil exporter to the United States (US), and lower crude oil prices tend to have a negative impact on the CAD value.