USD/CAD extends gains above 1.3800 with all eyes on the FOMC minutes

• The US Dollar remains firm, drawing support from the positive US Consumer Confidence data and easing trade war fears.
• The CAD remains on the defensive amid lower Oil prices and hopes of further BoC cuts.
• Later today, the tone of the FOMC minutes is likely to confirm the US Dollar's near-term direction.

The US Dollar is showing a moderate advance on Wednesday, extending gains after Tuesday's rebound. Upbeat US Consumer Confidence data and easing fears about trade wars are supporting the Greenback, with the release of the Fed minutes on focus.

The Conference Board's Consumer Confidence reading beat expectations on Wednesday with a 12.3 point rebound to a 98.0 reading, after having deteriorated steadily during the last five months, on the back of tariff uncertainty.

Upbeat US data sends debt fears to the background

The same survey revealed improving expectations on income, business conditions, and employment, while the percentage of consumers fearing an economic recession in the next 12 months declined, compared to the previous month.

These figures offset a significant decline in US Durable Goods orders, which fell by 6.3% in April, on the back of lower demand for aircraft. Likewise, the risk-on sentiment pushed government debt fears to the back seat, at least for now.

The Canadian Dollar, on the other hand, remains on the defensive, with Oil prices ticking lower, weighed by expectations that OPEC+ countries will increase supply from July. Furthermore, last week's data strengthened the case for further BoC easing in June, adding selling pressure on the Loonie. 

Today, the focus is on the minutes of the latest Fed meeting, which are expected to shed some more light on the bank's upcoming monetary policy decisions. The tone of the minutes is likely to determine the US Dollar's reaction until Friday's PCE inflation release.