The exchange rate of the Canadian dollar (CAD) to Indian rupee (INR) has recently shown strength, trading at a 90-day high near 64.37, which is 1.5% above its three-month average of 63.44. The currency has remained stable within a 2.9% range from 62.54 to 64.37, reflecting a period of relative consistency in the market.
Analysts have noted that the CAD's performance is closely tied to oil price dynamics, given Canada's status as a major oil exporter. While current oil prices are at $62.45—approximately 3.6% below the three-month average of $64.81 and within a volatile range of 60.96 to 70.13—any recovery or strengthening in oil prices could further support the CAD in the near future. A rise in oil prices tends to lift the Canadian economy, subsequently enhancing the loonie's value.
However, the interplay between the CAD and INR is also influenced by recent monetary policy decisions. The Bank of Canada has notably cut interest rates due to economic uncertainties—reducing rates first to 2.5% in September and then further to 2.25% in October. These cuts can have a dampening effect on the CAD by discouraging foreign investment, which is vital for currency strength.
On the Indian side, the INR is under considerable pressure due to multiple factors, including its record low against the USD at 88.62, influenced by increased visa fees and weak foreign equity inflows. The Reserve Bank of India has recently intervened to stabilize the rupee, but ongoing importer demand for dollars and a challenging export environment further complicate the currency's outlook.
Market experts suggest that these dynamics imply the CAD may continue to retain strength against the INR unless notable shifts occur in the oil market or further economic interventions by either country's central bank take place. As both currencies navigate their respective challenges, future exchange rate movements will heavily depend on global economic conditions and responses to local monetary policies.
