The loonie rose 0.54 of a cent to 89.52 cents US.
The Fed meeting Tuesday and Wednesday comes as the central bank's key stimulus program — its massive bond purchases designed to keep long-term rates low — is set to wind up at the end of this month.
The stimulus program has been a fixture since the financial crisis and there have been concerns over how the markets, and the U.S. economy, will fare without the prop from the Fed that also encouraged investors to buy into equities as returns on other securities were so small in comparison.
Traders will also look for reassurance that the Fed is in no hurry to raise rates from near zero. They will be looking to see that the Fed intends to leave the benchmark rate low for a "considerable period" after quantitative easing ends.
The Fed will also provide its latest take on economic conditions in the United States. Worries about the global economy helped ignite the sell-off on stock markets and the U.S. is seen as one of the few economic bright spots.
The latest reading on American and Canadian gross domestic product also comes out this week. Markets are looking for data to show that U.S. GDP in the third quarter grew at an annualized rate of three per cent.
Traders will also find out how the Canadian economy fared in August. Statistics Canada was expected to report that gross domestic product for the month came in flat.
On Tuesday, there was good news about the mood of the American consumer as the Conference Board's consumer confidence index jumped to 94.5, much higher than the 87 reading that economists expected.
Also, orders for U.S. durable goods retreated 1.3 per cent in September after a record 18.3 per cent tumble in August. The August drop followed a record 22.5 per cent increase in July, reflecting the volatile aircraft category.
Oil prices again found support at the US$80 a barrel level with December crude up 42 cents to US$81.42. It had slipped below the US$80 threshold Monday following the release of a report from Goldman Sachs that it expects oil prices to tumble into the next year as shale gas production grows and oil supply outstrips demand.
Copper prices were up for a fourth day with the December contract ahead three cents to US$3.09 a pound. December bullion inched up a dime to US$1,229.40 an ounce.