Recent forecasts and updates indicate a bearish outlook for the Canadian dollar (CAD) against the Indian rupee (INR), primarily driven by fluctuations in oil prices and domestic economic data.
The CAD has recently come under pressure due to falling oil prices, which are currently at 90-day lows near $65.50, approximately 5.1% below the 3-month average. As a commodity-linked currency, the CAD's value is closely tied to crude oil prices, given Canada's status as a major oil exporter. Analysts note that when oil prices decline, as seen recently, the CAD typically depreciates, reflecting reduced expectations for revenue from energy exports.
Additionally, recent employment and inflation data have raised concerns about the CAD's stability. Economists are anticipating a rise in unemployment to 7% for August, matching the peak seen earlier this year. This, combined with a dip in Canada’s annual inflation rate to 1.7% in July, has led markets to bet on potential interest rate cuts by the Bank of Canada, further weakening the currency.
On the other hand, the Indian rupee is facing significant pressure as well, reaching a historic low of 88.33 against the U.S. dollar due to increased U.S. tariffs on Indian goods and substantial foreign investor withdrawals from Indian equities. The Reserve Bank of India has intervened to stabilize the INR amid these challenges, but the outlook remains cautious, especially with the ongoing trade tensions.
From a recent perspective, the CAD to INR exchange rate is currently near 63.73, which is close to a 7-day low and only slightly above its 3-month average of 63.16. The CAD has been trading within a narrow range, reflecting market uncertainty, while the INR’s struggles reinforce its underperformance amid the adverse economic conditions.
Overall, the forecasts suggest that factors such as oil price trends, employment data, and fiscal policies in Canada and India will significantly influence the CAD/INR exchange rate in the near term. As both currencies navigate their respective challenges, traders and investors should closely monitor these developments for better timing on international transactions.
