Group 1 - The USD/CAD exchange rate is experiencing a narrow fluctuation around 1.37, influenced by central bank policy divergence, oil price volatility, and market liquidity changes [1][2] - The Federal Reserve has cut interest rates by 75 basis points in 2025, with a target range of 3.50%-3.75%, while market expectations suggest a continuation of the easing cycle [1] - The Canadian central bank maintains a neutral to hawkish stance, with a current benchmark rate of 2.25%, supporting the Canadian dollar [2] Group 2 - The Canadian economy shows resilience with a GDP growth of 2.6% in Q3 2025 and a declining unemployment rate of 6.5%, reinforcing the central bank's policy stance [2] - The Canadian dollar is closely linked to oil prices, with recent WTI crude oil prices rebounding to $57.20 per barrel, influenced by geopolitical tensions [2] - Technical analysis indicates that the USD/CAD pair is in a downward channel, with key support at 1.3640 and resistance at 1.3720-1.3750, suggesting potential further declines [3] Group 3 - Future exchange rate movements will depend on three core variables: the pace of Federal Reserve rate cuts, the timing of any policy shifts from the Bank of Canada, and the recovery strength of oil prices [3] - Some institutions are bullish on the Canadian dollar, predicting it could rise to 77 cents against the USD in 2026, but caution against potential risks from policy expectation adjustments and geopolitical tensions [3]

Group 1 - The core viewpoint of the articles indicates that the USD/CAD exchange rate is influenced by the divergence in monetary policy between the Federal Reserve and the Bank of Canada, alongside oil prices and geopolitical risks [1][2] Group 2 - The Federal Reserve completed its third rate cut of the year in December, totaling a 75 basis point reduction for the year, with a dovish outlook from Powell leading to expectations of continued easing [1] - The Bank of Canada maintained its interest rate at 2.25% for the second consecutive month in December after a total of 100 basis points cut during the year, signaling a potential rate hike in 2026 due to positive economic indicators [1] - The Canadian dollar is highly correlated with oil prices, with WTI crude stabilizing around $57.20 per barrel, driven by supply concerns from the Middle East, which supports the CAD [1] Group 3 - Ongoing trade uncertainties in North America, particularly regarding the USMCA negotiations and US tariffs on steel and aluminum, are exerting pressure on the Canadian dollar's fundamentals [2] - Technically, the USD/CAD has been in a downward trend since November, with key support levels at 1.3700 and 1.3640, indicating potential further declines [2] - The medium to long-term outlook for the exchange rate will depend on three main variables: the persistence of the policy divergence between the US and Canada, the recovery of oil prices, and the outcomes of trade negotiations [2]