The Canadian dollar (CAD) has recently seen fluctuations due to a mix of economic, political, and market factors. Analysts have noted that the slow progress in US-Canada trade negotiations is causing some concerns for the loonie, which has traded lower amid these uncertainties. The CAD is currently at 207.9 PKR, representing a 1.5% increase from its three-month average of 204.8 PKR, showing a relatively stable trading range of 5.1% from 199.4 to 209.5 PKR.
Political developments in Canada, particularly the recent leadership change involving Prime Minister Mark Carney and ongoing trade tensions with the U.S., are also influencing the CAD's outlook. The imposition of 25% tariffs on Canadian steel and aluminum by the U.S. has raised concerns about further economic pressure on Canada, leading many economists to predict limited upside for the CAD in the face of these trade barriers.
Moreover, the Bank of Canada's recent decision to maintain the interest rate at 2.75% has provided some support for the CAD by attracting foreign investment. Notably, rising oil prices, which are now 4.8% above their three-month average at $70.15 per barrel, continue to bolster the Canadian economy, as Canada is a major oil exporter. The significant volatility in oil prices, trading within a 31.1% range from $60.14 to $78.85, is critical for the CAD's value given its correlation with the commodity market.
In contrast, the Pakistani rupee (PKR) faces challenges amid escalating trade tensions following the U.S. reciprocal tariff rates on Pakistani goods. Furthermore, recent geopolitical tensions, particularly concerning India, add to the uncertainty surrounding the PKR.
As markets watch for developments in trade negotiations, oil prices, and monetary policy changes, experts suggest that the CAD's performance against the PKR will remain tied closely to these external factors, particularly the ongoing geopolitical landscape and domestic economic conditions in both countries.