The CAD to AUD exchange rate currently shows a bearish bias, reflecting recent economic challenges in Canada.
Key drivers influencing this trend include: Interest rates in Canada being stable at 2.25%, while the Reserve Bank of Australia may hike rates to 3.85% in early 2026. Additionally, weak manufacturing activity in Canada, with PMI data showing contraction, has negatively impacted the CAD. On the other hand, a recent stronger jobs report in Canada helps bolster confidence slightly.
The CAD/AUD pairing is expected to remain within a stable range as market volatility lessens, trading in a narrow scope for the next few months.
Upside risks include potential oil price recovery, which could strengthen the CAD due to Canada’s status as a major oil exporter. Conversely, a strong Australian dollar driven by continued expectations for RBA rate hikes could exert downward pressure on this currency pair.
Current price data shows CAD/AUD at 1.0884, slightly below the three-month average, while oil prices hover around $60.82, indicating ongoing market volatility.