CAD/CNY Outlook: Slightly positive, but likely to move sideways as the rate is near its 90-day average and recent highs amid mixed influences.
Key drivers:
• Rate gap: The Bank of Canada has lowered interest rates, while the People's Bank of China is trying to stabilize the yuan, affecting the CAD/CNY dynamics.
• Risk/commodities: Oil prices are currently above their average, which generally supports the Canadian dollar, but recent volatility can still pose challenges.
• One macro factor: China's recent government stimulus efforts have provided a boost to the economy, which may support the yuan.
Range: The CAD/CNY is expected to hold within its recent trading range as neither currency has a strong directional push lately.
What could change it:
• Upside risk: Stronger Canadian economic data or a continual rise in oil prices could support the CAD.
• Downside risk: Weakening investor confidence in global markets or further softening of oil prices could weigh on the CAD.