The Canadian dollar (CAD) has shown mixed performance in recent weeks, influenced by rising oil prices and strong retail sales figures. Currently trading at 63.15 INR, the CAD sits 1.3% above its three-month average of 62.33 INR, reflecting a stable trading range of 4.5% over the past period. Analysts indicate that oil price dynamics remain a significant driver for the CAD, as Canada is one of the largest oil exporters in the world. With oil trading at 68.44 USD, 1.5% above its three-month average, fluctuations in oil prices could continue to impact the CAD positively.
However, the Canadian dollar faces challenges from ongoing trade tensions with the U.S., particularly following the imposition of tariffs on Canadian goods, which has introduced a layer of uncertainty in the markets. Analysts warn that these trade issues may limit the CAD's upside potential despite recent rallies. The Bank of Canada's decision to maintain interest rates has provided some support but also reflects a wait-and-see approach amidst political changes and external pressures.
On the other hand, the Indian rupee (INR) is encountering headwinds stemming from rising energy prices, which threaten to drive inflation higher in India—a major oil importer. With the USD becoming stronger due to expectations surrounding U.S. economic policies, the INR has seen fluctuations influenced by global market trends. The rupee's current stance appears to be broadly balanced, yet it is affected by fears of increasing tariffs that could create volatility across Asian currencies.
In summary, market participants should closely monitor oil price trends and geopolitical developments, as these factors will likely dictate the CAD/INR exchange rate in the near term. The interplay between oil prices, trade relations, and interest rate policies remains central to understanding potential movements in this currency pairing.