The exchange rate forecast for the Canadian dollar (CAD) against the Indian rupee (INR) reveals a complex landscape influenced by both domestic and global factors. Analysts indicate that the CAD has found some support recently, particularly from rising oil prices following geopolitical tensions, such as drone strikes in Ukraine. As a major oil exporter, fluctuations in oil prices have a direct impact on the CAD, which is currently trading at 63.07 INR, near its 7-day low and just marginally below its 3-month average of 63.39 INR.
Recent cuts to the Bank of Canada's interest rate, which have lowered borrowing costs to 2.25%, are a response to economic uncertainties and a weakening job market. This monetary easing may reduce capital inflows, typically a supportive factor for the CAD. Furthermore, weakened U.S. labor data has exerted some downward pressure on the U.S. dollar, indirectly providing support for the CAD.
In contrast, the Indian rupee continues to face substantial challenges, including hitting a historic low against the U.S. dollar and persistent importer demand for dollars which has placed additional strain on the INR. The Reserve Bank of India's recent intervention efforts aim to stabilize the rupee amidst these pressures, but factors such as weak manufacturing exports and a narrowing policy rate differential with the U.S. add to the challenges that could hinder any recovery in the INR.
Market experts suggest that while the CAD’s trajectory will depend heavily on oil price movements — now at 64.20 USD, approximately 2.2% below its 3-month average — the ongoing economic pressures facing the INR may prevent significant appreciation against the CAD in the near term. Overall, the interplay between commodity prices, central bank policies, and global economic conditions will be crucial to watch as these currencies move forward.
