Recent forecasts and market updates indicate a complex interplay between the Indian Rupee (INR) and the Canadian Dollar (CAD) due to various economic factors affecting both currencies.
The CAD has been pressured by USD weakness, which might provide some support in the near future if oil prices, a critical driver for the CAD, gain momentum. Analysts suggest that the loonie could see a bounce back by the end of the week if oil prices continue to accelerate. Despite recent fluctuations, oil is currently trading at around $64.29, which is approximately 2.1% below its three-month average. This volatility reflects a significant influence on the CAD, given Canada's position as a major oil exporter.
On the other hand, the INR is subject to a range of negative pressures, including its recent slide to an all-time low against the USD, largely triggered by the increase in U.S. H-1B visa fees and diminished foreign equity inflows. The Reserve Bank of India’s interventions, particularly the expansion of its short dollar forward positions, indicate attempts to stabilize the rupee amid persistent demand for dollars from importers. Furthermore, ongoing concerns regarding manufacturing exports and the narrowing policy rate differential with the U.S. further complicate the outlook for the INR.
Market analysts expect the INR to face continued challenges due to these factors, which may keep the exchange rate within a stable but pressured range against the CAD. Currently, the INR to CAD rate is at 0.015824, just above its three-month average, suggesting a relatively stable trading pattern within a 2.6% range over the past months.
Overall, the dynamics between the INR and CAD will be closely tied to developments in U.S. economic policies, global oil prices, and local market responses, necessitating close monitoring for future fluctuations in the exchange rate.
