The recent forecasts for the CAD to BRL exchange rate indicate a complex interplay of factors influencing both currencies. The Canadian dollar (CAD) has faced increasing pressure as USDCAD surges above 1.38, mainly due to a cautious stance from the Bank of Canada combined with aggressive Federal Reserve policies promoting US dollar strength. Analysts suggest that with limited Canadian data expected soon, the CAD is likely to follow oil price movements.
In the last couple of months, the CAD has been supported by oil price recoveries, with recent values hovering at $69.67, which is approximately 2.5% above its three-month average. This aligns with Canada's position as a major oil exporter, where rising oil prices tend to bolster the currency. Still, the CAD has recently dropped to 14-day lows near 4.0154 against the BRL, 1.1% below its three-month average of 4.059, demonstrating volatility within a relatively stable 4.7% range.
Several significant events have influenced the CAD's trajectory. The political leadership change in Canada, with Prime Minister Justin Trudeau resigning in early 2025, and the subsequent appointment of Mark Carney may introduce uncertainties in economic policymaking. Furthermore, escalating trade tensions with the U.S. could dampen expectations for Canadian exports, thereby influencing the CAD negatively.
The Brazilian Real (BRL) also remains sensitive to commodity prices, paralleling its fluctuating path with the performance of key exports like oil and soybeans. Importantly, the BRL's behavior is often affected by political and economic instabilities within Brazil and globally. Trade tariffs imposed by the U.S. on Brazilian goods threaten to squeeze the BRL further, resulting in potential downward pressure on its valuation against currencies like the CAD.
In conclusion, while rising oil prices may lend support to the Canadian dollar, uncertainties from trade tensions and internal political dynamics complicate the outlook. The BRL's trajectory, influenced by similar commodity ties, remains vulnerable to external pressures. Analysts emphasize monitoring these dynamics closely as they will be critical in forecasting future movements for the CAD/BRL exchange rate.