Citi Group analysts recommended taking profits on short Canadian dollar positions against the Australian dollar, stating that the negative impact may have been fully priced into the CAD after the Bank of Canada cut rates by 25 basis points on Wednesday.

"Although the Bank of Canada cut rates as we expected, they now view rates as being at appropriate levels," wrote Citi's team, including Daniel Tobon, Brian Levine, and Osamu Takashima, in a report.

"Further significant rate cuts remain possible, but catalysts for such a repricing may take time to materialize."

Citi closed its long AUD/CAD spot position at 0.9192, locking in a 2.3% total return including carry. The trade was initiated in early September around 0.9004 with a target of 0.94.

The Bank of Canada lowered its benchmark overnight rate by 25 basis points to 2.25% on Wednesday, signaling that borrowing costs may now be at appropriate levels despite economic pressures from U.S. tariffs.