Bias: bearish-to-range-bound, as CAD/CNY sits below its 90-day average and in the lower half of the 3-month range.
Key drivers:
Rate gap: BoC easing contrasts with PBOC stabilizing actions, keeping policy divergence a factor for CAD versus CNY.
Risk/commodities: Oil firming and volatility underpin CAD’s commodity linkage; stronger oil tends to lift CAD, but jittery trade and rate expectations can keep moves within a narrow channel against the yuan.
One macro factor: Upcoming Canadian trade balance and employment data in January 2026 will be watched for signals on growth and inflation and could swing CAD/CNY short term.
Range: CAD/CNY is likely to drift within the 3-month range, with a bias toward the lower end of that band as it probes the floor of recent trades.
What could change it:
Upside risk: A clearer oil price rally or stronger-than-expected Canadian data could push CAD/CNY higher as market mood improves.
Downside risk: Strengthening yuan from PBOC actions or better-than-expected China data could weigh on CAD/CNY, pulling it toward the lower end of the range.
