CAD/INR Outlook:
The CAD/INR rate is slightly positive, currently trading above its recent average and within a stable range. However, the lack of a clear driver may limit significant movements.
Key drivers:
• Rate gap: The Bank of Canada’s steady rate contrasts with the Federal Reserve's easing approach, supporting the CAD.
• Risk/commodities: Oil prices are at highs, significantly benefitting the CAD, as Canada is a leading oil exporter.
• One macro factor: Recent job data shows strong performance in Canada, enhancing confidence in the CAD.
Range:
Expect CAD/INR to hold around current levels, with potential to drift within the recent 6.4% range.
What could change it:
• Upside risk: A sustained rise in oil prices could strengthen the CAD further.
• Downside risk: Renewed geopolitical tensions could weigh on the INR, influencing the CAD/INR exchange rate.