The market for the CAD to AUD exchange rate appears range-bound at present.
Key drivers include the interest rate differential, with the Bank of Canada maintaining its rate at 2.25% while the Reserve Bank of Australia is poised to increase rates to 3.85% in early 2026. Additionally, Canada’s recent stronger employment data supports the CAD, while waning risk appetite and fluctuating commodity prices affect the AUD, particularly given its ties to iron ore and coal.
Over the next few months, CAD to AUD is expected to trade within a stable range. Recent trading data indicates the pair is just below its three-month average, suggesting limited volatility.
Upside risks could stem from a significant rebound in oil prices, which would benefit the CAD. Conversely, continued global uncertainty or negative economic news from Australia could exert downward pressure on the AUD, impacting the exchange rate.