The CAD to INR exchange rate has recently experienced significant fluctuations, primarily influenced by external economic factors and market sentiment. Analysts observe that the Canadian dollar (CAD), also known as the "loonie," has firmed against weaker currencies, supported by rising oil prices. Oil prices have shown volatility, currently trading at 65.85, which is about 3.8% below its three-month average of 68.46. As Canada is one of the largest oil exporters, the CAD typically benefits from rising oil prices; however, the price has traded within a considerable range, highlighting ongoing uncertainties.
Recent economic data has introduced complexities for the CAD. The release of U.S. inflation data has pressured the CAD downward, resulting in a six-day low against the U.S. dollar. A marked job loss in Canada—40,800 positions in July—has further heightened concerns about the likelihood of an interest rate cut by the Bank of Canada (BoC). This potential shift in monetary policy could weaken the CAD as reduced rates typically deter investment.
Conversely, the Indian rupee (INR) is grappling with challenges stemming from U.S. trade policies, particularly a newly imposed 25% tariff on Indian exports, which has led to the rupee's depreciation to near-record lows. The Reserve Bank of India (RBI) held interest rates steady at 5.50%, citing risks posed by these tariffs and projecting a possible slowdown in GDP growth.
Market dynamics show the CAD to INR is currently at 7-day lows near 63.32, reflecting a 0.8% increase over its three-month average of 62.82. With the CAD trading in a stable range from 61.19 to 63.84, there is a cautious outlook given the economic indicators affecting both currencies. In summary, while oil prices remain a significant driver for CAD strength, the overall economic landscape and impending policy decisions from the Bank of Canada and Reserve Bank of India will crucially influence the future trajectory of the CAD to INR exchange rate.
