USD/CAD drops 0.4% as Bank of Canada delivers expected 25bp rate cut

USD/CAD fell 0.4% to 1.3580 following the Bank of Canada's decision to cut interest rates by 25 basis points, as widely anticipated by markets. This marks the BoC's third consecutive rate cut, bringing the overnight rate to 4.25% as the central bank responds to cooling inflation and slowing economic growth. The Canadian dollar strengthened despite the cut, as markets had already priced in the move and focused on the less-dovish tone in the accompanying statement. Oil prices holding above $70/barrel also provided support for the commodity-linked CAD. Technical analysis shows USD/CAD breaking below the 1.3600 psychological level, with next support at 1.3550 (20-day MA). Resistance now sits at 1.3630. The pair's direction will likely depend on today's Fed decision - a larger 50bp cut could push USD/CAD toward 1.3500, while a modest 25bp reduction might see limited downside.