What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-07 · 31 added, 27 removed, 64 unchanged (48% of the section changed)

46 unchanged sentences

Interest on the primary deposit account, if any, accrues daily and is paid monthly.

The interest rate in effect as of June 30, 2025 was an annual nominal rate of 0.91%.

The following chart provides the daily rate paid by the Depository since June 30, 2020:

The interest rate in effect as of September 30, 2025 was an annual nominal rate of 0.71%.

The following chart provides the daily rate paid by the Depository since September 30, 2020:

In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust.

9 unchanged sentences

These estimates and assumptions affect the Trust’s application of accounting policies.

In addition, please refer to Note 3 to the financial statements of the Trust for further discussion of the Trust’s accounting policies and Item 7 – Management’s Discussions and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates included in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2024.

There were no material estimates, which involve a significant level of estimation uncertainty and had or are reasonably likely to have had a material impact on the Trust's financial condition, used in the preparation of these financial statements.

Results of Operations

During the three and six months ended June 30, 2025 and 2024, the Trust’s net comprehensive income (loss) was, in part, impacted by market volatility resulting from global tariff gyrations and mounting US recession concerns for 2025, and expectations around the Federal Reserve (the “Fed”) easing and heightened geopolitical concerns for 2024, which are considered to be unusual or infrequent events.

Although the full and direct impact of global tariffs, US recession concerns, Fed easing expectations and rising geopolitical tensions, on the Trust’s net comprehensive income (loss) during the six months ended June 30, 2025 and 2024, cannot be known, it is believed that they have each independently impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.

The Canadian Dollar (CAD/USD) moved higher in the second quarter of 2025, helped by continued weakness in the U.S.

dollar and a shift in domestic interest rate expectations.

Canadian inflation data in June came in stronger than expected, making it less likely that the Bank of Canada will cut rates in July.

This gave the CAD a boost, though weak energy prices limited the upside.

The Canadian Dollar (CAD/USD) continued lower in the second quarter of 2024.

The main driver for this was gains in the US

dollar, with the Fed sticking to its more hawkish stance, causing further delays in rate cut expectations.

However, renewed weakness

in oil prices in the second quarter of 2024 due to weakening macro sentiment, fading geopolitical risk premium, US crude inventory

builds, and OPEC’s plans to gradually bring back barrels later this year, added further downward pressure.

The Canadian Dollar (CAD/USD) appreciated year-to-date through the second quarter of 2025, supported mainly by continued weakness in the U.S.

In the first quarter of 2025, the CAD remained mostly flat as falling oil prices, tariff tensions with the U.S., and broader risk-off sentiment weighed on performance.

However, in the second quarter of 2025, the Canadian Dollar gained ground as inflation data came in stronger than expected, lowering the chances of a Bank of Canada rate cut in July.

This shift in interest rate expectations helped the CAD rise, even as oil continued to struggle, but weak energy prices were still a headwind for the pair.

The Canadian Dollar (CAD/USD) was pressured in the first half of 2024, mainly by gains in the US dollar.

The Fed’s higher-for longer rhetoric and stickier-than-expected US inflation pushed out expectations for rate cuts.

Higher rates generally provide support

for the country’s currency.

US economic resilience also boosted demand for the dollar, pressuring the pair.

While rising energy prices

did limit some of the downside in the first quarter of 2024, given the country is a major exporter of crude oil, the positive impact was

outweighed by the USD gains.

During the three and nine months ended September 30, 2025 and 2024, the Trust's net comprehensive income (loss) was, in part, impacted by market volatility resulting from global tariff gyrations and mounting U.S.

economic uncertainty for 2025, and expectations around the Federal Reserve (the “Fed”) easing and heightened geopolitical concerns for both 2024 and 2025, which are considered to be unusual or infrequent events.

Although the full and direct impact of global tariffs, U.S.

economic concerns, Fed easing expectations and rising geopolitical tensions, on the Trust's net comprehensive income (loss) during the three and nine months ended September 30, 2025 and 2024, cannot be known, it is believed that they have each independently impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.

The Canadian Dollar (CAD/USD) declined in the third quarter of 2025.

Weak employment data, a softer inflation print, a large miss in the second quarter of 2025 annualized GDP, and tariff-related headwinds all weighed on the CAD.

The Bank of Canada also cut interest rates by 0.25% in September.

While USD weakness provided some support it the first half of the year, the dollar’s regained strength during the quarter added additional pressure on the CAD.

Furthermore, with Canada being a major oil exporter, falling energy prices amid mounting concerns about an upcoming global oil supply overhang continued to keep the ceiling on the pair.

The Canadian dollar (CAD/USD) ended the third quarter of 2024 higher, largely due to the downturn in the US dollar;

the Fed officially kicked off its easing cycle in September.

However, the downturn in energy prices limited the upside given Canada is a major crude oil exporter.

A subdued Canadian economy has also been a headwind for the CAD and has increased the call for a supersized rate cut;

the Bank of Canada has already eased three times this year, for a total of 0.75% of cuts.

The Canadian Dollar (CAD/USD) appreciated in the first three quarters of 2025, mainly supported by a weaker US dollar.

The majority of the gains occurred in the second quarter, when stronger Canadian inflation data lowered the chances of the Bank of Canada cutting rates, which boosted the CAD even amid challenges from weaker energy prices.

Q3 pared some of these gains as a deteriorating macro backdrop paved the way for the resumption of the Bank of Canada's easing cycle, and the USD gained some ground.

However, sustained weakness in oil prices weighed on the CAD for the entirety of the period, outweighing the positive impact from USD depreciation.

The Canadian dollar (CAD/USD) ended the first three quarters of 2024 lower, mainly due to US dollar strength and weak energy

The Fed’s higher-for-longer rhetoric and US economic resilience pushed out expectations for rate cuts in the first half of the

higher rates generally provide support for the country’s currency.

While rising energy prices due to geopolitical tensions did

limit some of the downside in the first quarter of 2024, this became a headwind in the second and the third quarter of 2024 as crude oil

was pressured at first by recession concerns, and then low refining margins decreasing crude demand, the bearish Trump trade,

expectations for a supply glut in 2025, and the OPEC spare capacity overhang.

Geopolitical risk premium also faded with no real

supply disruptions playing out.

Additionally, the interest rate paid by the Depository has generally trended downward over the past year to the current interest rate of 0.71%, as set forth in the FXC Rate Chart above.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis