Bias: bullish-to-range-bound, current CAD/INR is above the 90-day average and sits in the upper half of its 3-month range.
Key drivers:
- Rate gap: BoC policy has eased to a modest level, while RBI remains comparatively tighter, creating a yield gap that tends to support INR against CAD but leaves the cross range-bound overall.
- Oil/risk: Oil is above its 3-month average with notable volatility, which generally supports CAD as an oil exporter.
- Macro factor: RBI interventions to curb rupee weakness amid outflows, with forecasts of further depreciation for the rupee in coming months.
Range: CAD/INR likely to drift within the recent 3-month band, hovering near the upper end.
What could change it:
- Upside risk: a sustained oil rally or stronger Canadian data on trade and jobs could push CAD higher against INR.
- Downside risk: rising Canadian unemployment or renewed U.S. protectionist moves that weigh on trade could push CAD lower.