The market bias for CAD to INR is currently range-bound, trading around 2.5% above its three-month average.
Key drivers include:
- The interest rate differential remains stable, with Canada’s central bank maintaining a policy rate at 2.25%, which supports CAD.
- Oil prices are a concern, as the recent dip to $61.32, below the average, indicates potential weakness for the CAD, as Canada is a major oil exporter.
- Strong job growth in Canada with 54,000 new jobs in November adds confidence to the CAD's performance.
The near-term trading range for CAD to INR is expected to remain stable, fluctuating within the established levels.
An upside risk could stem from a rebound in oil prices boosting the CAD, while a downside risk includes a significant depreciation of the INR, potentially driven by increasing tariffs or negative global economic signals.