CAD/INR Outlook:
The CAD/INR remains slightly positive but likely to move sideways as it trades just above its 90-day average. Although there has been some upward pressure from commodity prices, the overall lack of a clear driving factor suggests limited directional movement.
Key drivers:
• Rate gap: The Bank of Canada has maintained its interest rate, while the Indian central bank's more flexible policy might affect capital flows between the two currencies.
• Risk/commodities: Oil prices have surged substantially above their average, which usually strengthens the Canadian dollar as Canada is a major oil exporter.
• One macro factor: A recent trade agreement has boosted India's exports significantly, providing support for the Indian rupee amidst fluctuating market conditions.
Range:
Expect CAD/INR to hold its position with potential minor fluctuations within its recent range.
What could change it:
• Upside risk: A sustained increase in oil prices could bolster the CAD.
• Downside risk: Renewed geopolitical tensions impacting India's economy could weaken the INR.
