The Canadian dollar strengthened past C$1.40 per US dollar, hovering near monthly highs as narrowing US–Canada rate differentials, firm domestic fundamentals, and a weaker greenback converged ahead of the Bank of Canada’s policy decision. The loonie drew support from broad US dollar softness, while markets priced in near-certain 25 bps cuts from both the Fed and the BoC. Canada’s relative rate outlook, however, remains more favorable even after a 275 bps cumulative easing from its 5% peak, the 2.25% policy rate continues to deliver positive real yields against a 2.4% headline CPI. Analysts view this week’s cut as likely marking the end of the BoC’s easing cycle, with officials expected to strike a neutral-to-hawkish tone to safeguard credibility amid mild inflation pressures and a 7.1% unemployment rate. Meanwhile, resilient crude and non-energy export prices are bolstering Canada’s external balance, helping the loonie outperform peers as global central banks pivot to looser policy.