CAD/AUD Outlook:
Likely to decrease as CAD trades below its recent average and near lows, pressured by weak oil prices.
Key drivers:
• Rate gap: The Bank of Canada has maintained a cautious approach while the Reserve Bank of Australia recently raised rates, supporting a stronger AUD.
• Risk/commodities: CAD weakened as oil prices recently slid below average, influencing its value due to Canada’s heavy reliance on oil exports.
• One macro factor: Canada’s economy flatlined recently, limiting support for the CAD and contributing to its downward pressure.
Range:
The CAD/AUD pair is likely to drift within its recent range as negative trends dominate.
What could change it:
• Upside risk: A rebound in oil prices could strengthen the CAD, leading to an increase in its value against the AUD.
• Downside risk: Continued weakness in the services sector may further limit CAD's recovery potential.