Bias: range-bound, current CAD/SGD sits below the 3-month average and near the middle of its 3-month range, with the relation to the 90-day average not clear.
Key drivers:
Rate gap: Bank of Canada remains relatively supportive, while MAS has expanded accommodative policy, creating a modest cross-rate gap that can help CAD if oil stays firm; the path will hinge on policy signals.
Risk/commodities: Oil holds firm with volatility, boosting CAD through Canada’s energy exports and adding to cross-rate dynamics.
Macro factor: January 2026 Canadian trade and employment data could surprise to the upside, nudging CAD higher and guiding near-term moves; investors will scrutinize the details for momentum.
Range: CAD/SGD is likely to drift within the 3-month range, with a tendency to test the upper end if oil sustains gains, though a breakout seems unlikely soon, given thin liquidity.
What could change it:
Upside risk: Oil prices stay firm or rise, reinforcing the CAD premium.
Downside risk: U.S. tariff tensions escalate, weighing on Canadian exports and CAD.
