AUD/CAD 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 Reserve Bank of Australia's recent rate hike contrasts with the Bank of Canada's steady approach, providing a support boost for the AUD.
- Risk/commodities: Oil prices are at 90-day highs, which can benefit the CAD but may require a more stable geopolitical landscape to capitalize fully.
- One macro factor: Australia's inflation rise above target levels indicates the RBA may continue its tightening, potentially supporting the AUD.
Range:
The AUD/CAD is likely to drift within its recent 3-month range, showing stability despite recent fluctuations.
What could change it:
- Upside risk: A stronger-than-expected economic report from Australia could further boost the AUD.
- Downside risk: Heightened tensions between the U.S. and Canada may lead to increased pressure on the CAD, negatively impacting the pair.