CAD/AUD Outlook:
Bearish, as the pair is below its recent average and near recent lows amid growing pressures.
Key drivers:
• Rate gap: The Bank of Canada maintains a cautious stance with steady rates, while the Reserve Bank of Australia recently raised interest rates, favoring the AUD over the CAD.
• Risk/commodities: Recent stability in oil prices is elevated, but with the CAD's depreciation risks from lower oil demand, the outlook is challenged.
• Macro factor: Australian consumer confidence is deteriorating, causing downward pressure on the AUD as households face budget strains.
Range:
Expect CAD/AUD to drift lower within its recent range, likely testing its lower limits.
What could change it:
• Upside risk: A significant correction in oil prices may improve CAD's stance.
• Downside risk: Further declines in Australian consumer confidence could exacerbate AUD's weaknesses.