TORONTO--The Canadian dollar is moderately higher in subdued trading Wednesday as markets await the release of the Bank of Canada's quarterly policy report and the U.S. Federal Reserve's interest rate announcement. The U.S. dollar is at C$0.9893 Wednesday, from C$0.9924 late Tuesday, according to data provider CQG. On the domestic front, traders are waiting for the Bank of Canada's monetary policy report at 10:30 a.m. EDT and the subsequent news conference with Governor Mark Carney and Senior Deputy Governor Tiff Macklem at 11:15 a.m. EDT. The report will flesh out the details of the bank's current forecast for the economy and inflation. It comes after the central bank surprised markets by retaining its modest bias towards higher interest rates in its policy statement as it kept its overnight target rate at 1%. The Canadian dollar enjoyed a sudden burst of strength after the bank released the statement, reflecting the fact the currency derives considerable support from the Bank of Canada's status as the only major central bank explicitly poised to raise rates at some point. "The BOC's hawkish bias juxtaposed against any other advanced economy central bank is notable and likely to support a stronger [Canadian dollar] into year-end," said a report from strategists at Scotiabank. While the Fed isn't expected to launch any new monetary easing initiatives after its policy concludes this afternoon, the statement will likely once again emphasize that interest rates in the U.S. will remain at rock-bottom levels for the foreseeable future. Scotiabank's strategists expect USD/CAD to range between 0.9880 and 0.9954 on Wednesday.

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