The exchange rate of the Canadian dollar (CAD) against the Pakistani rupee (PKR) has been influenced by a range of factors in recent months. Analysts note that the CAD has shown resilience, buoyed by rising oil prices that have reached a two-week high. This recovery in crude prices is closely tied to developments regarding U.S. sanctions on Russia, which may have a cascading positive effect on Canada's oil-exporting economy.
The Bank of Canada (BoC) is expected to maintain its benchmark interest rate at 2.75%, reflecting a hawkish stance that supports the CAD. Interest rate decisions by the BoC are crucial, as higher rates generally attract foreign capital and bolster currency strength. However, the CAD is also facing headwinds from trade tensions with the U.S., particularly a recent imposition of tariffs which could limit its upside potential.
Market observers have noted that the CAD to PKR rate recently dipped to 30-day lows near 205.5, just below its three-month average. The CAD has traded within a relatively stable range of 200.9 to 209.5, although analysts suggest volatility may increase due to external factors and economic indicators. With oil prices currently at $72.51—7.1% above its three-month average—any fluctuations in the oil market could significantly impact the CAD's value.
On the other side, the PKR has been under pressure due to various macroeconomic challenges, including heightened tensions with neighboring India and persistent trade barriers imposed by the U.S. These circumstances, coupled with a weakened job market leading to declining remittances from overseas workers, present ongoing risks for the PKR.
In summary, the CAD is currently supported by rising oil prices and central bank policy, but impacted by trade tensions and geopolitical uncertainties. Meanwhile, the PKR faces challenges that could limit its strength against the CAD. This dynamic makes it essential for businesses and individuals to closely monitor market developments to optimize their currency exchange strategies.