CAD/TWD Outlook:
The CAD/TWD is slightly positive, trading just above its recent average and showing stability within its range. However, it lacks a clear driver to push it significantly higher.
Key drivers:
• Rate gap: The Bank of Canada is maintaining a higher interest rate compared to Taiwan's central bank, which is keeping its rate steady at 2.00%.
• Risk/commodities: Oil prices are near 90-day highs, which typically supports the CAD as Canada is a major oil exporter.
• Economic performance: Taiwan’s exports surged significantly last year, indicating strong demand which could lend support to the TWD.
Range:
Expect the CAD/TWD to hold within its established range, with little volatility expected in the short term.
What could change it:
• Upside risk: A significant rise in oil prices could strengthen the CAD further.
• Downside risk: A poor GDP report from Canada could put downward pressure on the CAD.