In recent weeks, the exchange rate for CAD to AUD has shown signs of pressure, trading at 7-day lows around 1.0908, which is slightly below its 3-month average of 1.0976. Analysts note that the pair has been quite stable over the past few months, oscillating within a 3.4% range from 1.0837 to 1.1203.
The Canadian dollar (CAD) has faced challenges primarily due to the weakness of the U.S. dollar, as the loonie typically maintains a positive correlation with it. With the Bank of Canada implementing two rate cuts in recent months—bringing rates down to 2.25%—concerns about a weakened job market and economic uncertainties are weighing on the currency. Economists point out that lower interest rates could deter foreign investment, further impacting the CAD negatively.
Conversely, the Australian dollar (AUD) received a significant boost from unexpectedly strong employment figures, which drove expectations for continued hawkishness from the Reserve Bank of Australia (RBA). With unemployment falling more than forecasted, analysts emphasize that robust demand for Australian exports will likely support the AUD in the near term.
Oil prices remain a crucial factor in the CAD's performance, given Canada's status as a major oil exporter. Currently, oil has dipped to 64.29 USD, 2.1% below its 3-month average, which can negatively influence the CAD as lower oil prices typically reduce export revenues. Recent volatility in oil prices has been substantial, with movements in a 15% range between 60.96 and 70.13 USD.
The exchange outlook for CAD to AUD will depend heavily on the interplay between oil prices, global economic sentiment, and monetary policy decisions from both the Bank of Canada and the Reserve Bank of Australia. Market experts suggest that an increase in oil prices could support the CAD, while continued strength in Australia’s job market and its commodity exports could fortify the AUD. Investors and businesses engaged in international transactions should closely monitor these trends to strategize effectively.
