Core Viewpoint - The Canadian central bank has initiated a 25 basis point interest rate cut, aligning with the Federal Reserve's easing cycle, but with a more proactive approach, creating a distinct policy stance compared to the Fed [1] Group 1: Currency Dynamics - The USD/CAD exchange rate is currently at 1.3939, reflecting a slight increase of 0.03% from the opening price of 1.3935 [1] - The early rate cut by the Bank of Canada typically puts downward pressure on the Canadian dollar, which, due to its weight in the USD index, can support a rebound in the dollar index [1] Group 2: Interest Rate Outlook - The Bank of Canada's earlier entry into the rate cut cycle has limited its future policy space, while the Federal Reserve is expected to gradually shift towards rate cuts [1] - As the interest rate differential between Canada and the U.S. narrows, this trend may provide fundamental support for the Canadian dollar in the long term, potentially weakening the upward momentum of the dollar index [1] Group 3: Technical Analysis - The USD/CAD pair remains above the 9-day Exponential Moving Average (EMA) currently at 1.3838, indicating strong short-term price momentum [2] - The pair has surpassed the four-month high of 1.3924 set on August 22, with potential to challenge the five-month high of 1.4016 reached on May 13 [2]