The Canadian dollar (CAD) has been facing pressures recently, primarily influenced by declining oil prices, which have reached a four-month low. Analysts note that as a commodity-linked currency, the CAD's performance is closely tied to the fluctuations in oil prices, which recently traded at $60.48 per barrel, reflecting a 2.1% drop. With expectations of further softness ahead of an OPEC meeting, the CAD has shown signs of weakness, trading at 202.6 PKR, which is 1.4% below its three-month average of 205.4 PKR.
Forecasts indicate that the upcoming potential interest rate cuts by the U.S. Federal Reserve could lead to a 2.8% appreciation of the CAD within the next three months, offering some optimism for Canadian dollar traders. However, the CAD's recent plunge against the U.S. dollar, hitting a 4.5-month low at 1.3960, raises concerns about continued pressure in the wake of manufacturing sector contraction reflected in a fall of the S&P Global Canada Manufacturing PMI to 47.7 in September.
Simultaneously, the Pakistani rupee (PKR) is navigating its challenges, influenced by the State Bank of Pakistan's decision to maintain a key policy rate of 12% amid ongoing price risks. This rate stability is aimed at addressing concerns in the energy sector and managing currency stabilization efforts. Recent developments, including a $4.47 billion loan to improve energy sector efficiency and a strategic trade agreement with the United States, suggest some potential for bolstering the PKR's position.
The CAD's range has been relatively stable, trading within a 4.0% band from 201.4 to 209.4 PKR, indicating a measured exchange environment despite recent volatility in oil prices, which have fluctuated within a 14.3% range from $64.20 to $73.37. As these variables unfold, traders and analysts will closely monitor both oil market trends and domestic monetary policies impacting the CAD and PKR exchange rates in the coming months.
