The current market bias for the AUD to CAD exchange rate is range-bound. Key drivers include the interest rate differential, as the Reserve Bank of Australia is expected to raise rates in 2026 while the Bank of Canada maintains a stable rate. A stronger jobs report in Canada has boosted economic confidence, potentially strengthening the CAD. Additionally, the Canadian dollar remains sensitive to oil prices, which are currently experiencing volatility below their three-month average.
In the near term, the exchange rate is likely to remain within a stable range, reflecting recent trading patterns. Upside risks for the AUD could arise from a significant rebound in commodity prices, while downside risks include potential negative impacts from any geopolitical instability or weaker-than-expected economic data in either Australia or Canada. The AUD/CAD pair recently traded at 0.9154, close to its three-month average, within a range of 0.9069 to 0.9231.