The recent performance of the Canadian dollar (CAD) against the Pakistani rupee (PKR) reflects significant influences from both oil price movements and geopolitical events. As of the latest data, the CAD is trading at 207.1 PKR, which is 2.4% above its three-month average of 202.2 PKR, demonstrating a relatively stable trading range of 7.6%, from 193.7 to 208.5 PKR. Analysts have noted that this resilience in the CAD is closely tied to heightened oil prices, which have surged 13.8% above their three-month average, currently standing at 76.45 USD per barrel. The Canadian economy, heavily reliant on oil exports, tends to strengthen with rising oil prices, thereby providing support to the loonie.
Market observers highlight that recent developments, including the political shift in Canada and trade tensions with the U.S., have also impacted the CAD. With Prime Minister Justin Trudeau's resignation in January 2025, followed by Mark Carney's appointment, an atmosphere of political instability has arisen, contributing to cautious sentiment among investors. Trade tensions, particularly the 25% tariffs imposed by the U.S. on Canadian steel and aluminum, alongside retaliatory measures from Canada, have further complicated the outlook for the CAD. Economists suggest that these factors create a mixed environment for the CAD, where potential gains may be limited due to ongoing trade uncertainties and geopolitical challenges.
In contrast, the PKR has been affected by external pressures, including a 29% reciprocal tariff imposed by the U.S., impacting Pakistan's trade dynamics. Additionally, while remittances from Pakistani migrant workers have been robust, helping to stabilize the local economy amidst a challenging job market, recent geopolitical escalations, particularly tensions with India, pose risks for the PKR's stability. The overall uncertainty in the region combined with external trade pressures might create additional downward pressures on the PKR.
Forecasts for the CAD/PKR exchange rate suggest that continued fluctuations in oil prices and geopolitical stability will play significant roles in determining the future trajectory. As the global economic landscape remains interconnected, both Canadian and Pakistani economic indicators will influence traders and investors closely monitoring the exchange rate for international transactions.