The CAD to INR exchange rate is currently bearish, reflecting recent economic indicators and market movements.
Key drivers include:
- Interest rates remain stable, with the Bank of Canada holding its policy rate at 2.25%, while the Indian economy faces upward pressure on the INR with forecasts indicating potential depreciation towards 90 per USD.
- Oil prices are currently struggling, trading below their 3-month average, which typically affects the CAD due to its linkage to Canadian oil exports.
- Economic growth in Canada appears resilient, highlighted by a stronger-than-expected jobs report, while ongoing concerns about India’s inflation could impact investor sentiment towards the INR.
The exchange rate may trade within a broad range as it settles between current levels and recent highs. Upside risks include an unexpected increase in oil prices, which could bolster the CAD, while downside risks stem from further depreciation of the INR amid structural weaknesses and external pressures.