CAD/TWD Outlook:
Slightly positive, but likely to move sideways as the rate is above its 90-day average but lacks a clear driver.
Key drivers:
• Rate gap: The Bank of Canada has maintained a cautious stance with steady interest rates, while Taiwan's Central Bank has allowed the TWD to appreciate without intervention, creating a divergence.
• Risk/commodities: Oil prices are currently 10% above their recent average, supporting the CAD, but ongoing US-Canada tensions have dampened its impact.
• One macro factor: Renewed optimism surrounding U.S.-China trade relations has boosted the TWD but also poses risks for its exporters.
Range:
Expect CAD/TWD to hold within its recent 3-month range with potential for minor fluctuations.
What could change it:
• Upside risk: Continued strength in oil prices could reinforce the CAD's position.
• Downside risk: Escalation of trade tensions between the U.S. and Canada could pressure the CAD further.