Bias: range-bound, current below the 90-day average while the pair sits in the upper half of the 3-month range.
Key drivers:
Rate gap: BoC’s easing stance keeps Canada comparatively attractive against Pakistan’s inflation-focused policy, supporting CAD when risk appetite improves, while the PKR faces ongoing external financing pressures.
Risk/commodities: Oil is trading above its recent average and volatile, with traders adjusting positions as oil swings, a firm oil path tends to lift CAD versus PKR.
Macro factor: PKR is expected to gradually weaken through 2026 as reforms progress and reserves stabilise, a trend tied to IMF programs and financing inflows.
Range: CAD/PKR is likely to drift within the 3-month range, with occasional tests near the edges if data surprises occur.
What could change it:
Upside risk: Sustained rally in oil or a stronger Canadian data run could lift CAD further against PKR.
Downside risk: Renewed PKR weakness on external financing pressures or a sharper slide in oil prices could push CAD lower.