The current exchange rate forecast for CAD to INR reflects a complex interplay of factors impacting both currencies. As of early October, the Canadian dollar (CAD) trades at around 63.52 INR, which is at a 14-day low and near its three-month average. The CAD has experienced stability within a 2.6% range from 62.57 to 64.19 INR. Recent reporting indicates that the decline of the CAD has been influenced by sliding oil prices, which reached a four-month low at approximately $60.48 per barrel, raising concerns about oversupply as OPEC meetings loom.
Analysts suggest that the CAD may rebound if expectations for U.S. Federal Reserve rate cuts materialize, potentially limiting the strength of the U.S. dollar and boosting the CAD by about 2.8% in the upcoming months. However, the CAD's performance is being hampered by broader economic signals, such as a contraction in Canada's manufacturing sector, indicated by a drop in the S&P Global Canada Manufacturing PMI. This situation raises the likelihood of further interest rate cuts by the Bank of Canada.
On the other side, the Indian rupee (INR) faces its challenges, with a record low against the U.S. dollar due to ongoing trade tensions and associated tariffs. The Reserve Bank of India is making strides to increase the rupee's global usage, an effort that may enhance its position in the market. Despite the rupee's depreciation, analysts expect that the RBI may cut interest rates to stimulate economic growth, which may further affect the INR’s value.
Overall, exchange rate fluctuations between CAD and INR are crucially influenced by commodity prices, particularly oil, alongside central bank policies enforced by the Bank of Canada and the Reserve Bank of India. Given that Canada is a major oil exporter, the recent downward trend in oil prices is pivotal to the CAD’s outlook. As market conditions stabilize, it is critical for stakeholders to monitor ongoing developments in both commodity markets and monetary policies to navigate potential impacts on international transactions effectively.
