The Canadian dollar rose modestly against its US counterpart on Wednesday after the Bank of Canada maintained a wait-and-see approach on interest rates, while investors continued to assess the future of the North American free trade agreement amid ongoing uncertainty.

The Canadian dollar, commonly known as the loonie, gained about 0.2% to C$1.3925 per US dollar after trading in a range between C$1.3900 and C$1.3957 during the session. It had touched a six-month low of C$1.3969 on Tuesday.

The Bank of Canada left its benchmark interest rate unchanged at 2.25% for a fifth consecutive meeting, citing limited evidence that higher energy prices are feeding into broader inflation across the economy.

Swap market data showed investors now expect only around 32 basis points of rate increases by December, down from 37 basis points before the central bank's decision.

Darcy Briggs, portfolio manager at Franklin Templeton Canada, said Canadian economic data "is not strong," giving the central bank room to remain on hold and monitor developments.

First-quarter GDP data had previously shown the Canadian economy slipping into a technical recession.

Briggs noted that Canada is facing three major pressures: higher energy prices, the repricing of a large number of mortgages at higher interest rates, and ongoing trade uncertainty.

In the same context, Donald Trump said on Wednesday that he may not renew the free trade agreement between the United States, Canada, and Mexico.

Global oil prices one of Canada's key exports also climbed about 2.5% to $93.78 per barrel following exchanges of strikes between the United States and Iran.

In the bond market, Canadian government bond yields were mixed, while the benchmark 10-year yield was little changed at 3.487%.