The Canadian dollar weakened to its lowest level in seven months against its US counterpart on Wednesday as investors grew more cautious ahead of the Federal Reserves interest rate decision, while lower oil prices continued to weigh on the currency of one of the worlds major energy exporters.

The Canadian dollar fell 0.3% to C$1.4030 per US dollar, or 71.28 US cents, after touching an intraday low of C$1.4036, its weakest level since November.

George Davis, Chief Technical Strategist at RBC Capital Markets, said weakness in the Canadian dollar against the euro, British pound, and Japanese yen helped keep USD/CAD above the 1.4000 level over the past two sessions.

Were also seeing some short-covering in the US dollar ahead of todays Federal Open Market Committee meeting, as market participants reduce risk exposure, Davis said.

The US dollar edged slightly higher against a basket of major currencies before the conclusion of the Feds two-day policy meeting, the first chaired by Kevin Warsh since taking over as Federal Reserve Chair, with investors watching closely for any signs of a more hawkish policy stance.

In energy markets, oil prices rose 0.7% to $76.67 per barrel after President Donald Trump said the newly announced ceasefire agreement with Iran was not yet final and warned that hostilities could resume if he was dissatisfied with the implementation of the deal.

Despite the rebound, oil prices remain down roughly 10% since the start of the week.

The decline in oil prices has also been a negative factor for the Canadian dollar because it weakens Canadas terms of trade, Davis added.

Investors are now looking ahead to Canadas April retail sales report due on Friday, which could provide additional clues about the outlook for the domestic economy. Economists expect sales to rise 0.6% from March.

In the bond market, Canadian government bond yields were mixed across the curve, with the 10-year yield falling 1.9 basis points to 3.372%.