CAD/TWD Outlook:
Slightly positive, but likely to move sideways as the rate is above its recent average but lacks a clear driver.
Key drivers:
• Rate gap: The Bank of Canada maintains a cautious approach with steady rates, while Taiwan's Central Bank allows the TWD to strengthen without intervention, leading to a wider interest rate gap.
• Risk/commodities: Oil prices are currently volatile, trading well above average, which usually supports the CAD; however, significant fluctuations can create uncertainty.
• One macro factor: Ongoing trade tensions and tariffs between the U.S. and Canada could dampen Canadian economic growth, limiting CAD's upward movement.
Range:
Expect the CAD/TWD to hold steady as it trades within a relatively stable range, drifting around current levels.
What could change it:
• Upside risk: A strong rebound in oil prices could provide support for the CAD.
• Downside risk: Continued weakness in Canadian economic indicators could pressure the CAD lower.
