The exchange rate forecast for the Indian Rupee (INR) against the Canadian Dollar (CAD) reflects recent developments in both currencies and their respective economies. The INR has shown signs of stabilization following significant intervention by the Reserve Bank of India (RBI), which sold between $3 billion to $5 billion in the foreign exchange market, resulting in the rupee's largest single-day gain in four months. In the options market, there is a notable tilt in favor of the rupee, suggesting increased demand for INR call options, as indicated by the lowest level of USD/INR 25-delta risk-reversal since 2012.
Conversely, the CAD has been under pressure due to falling oil prices, with the currency sliding recently as crude prices hit a five-month low. Analysts highlight that the CAD's performance is closely linked to commodity prices, especially oil, as Canada is a major oil exporter. The loonie's depreciation has been compounded by softer GDP figures and trade uncertainties with the U.S. A recent rate cut by the Bank of Canada also indicates the central bank's concern over economic risks and a weakening job market, further contributing to CAD's challenges.
As of now, the INR to CAD exchange rate stands at approximately 0.015819, which is just above its three-month average, having maintained a stable 2.6% range over that period. Market analysts observed that fluctuations in oil prices, trading currently at $65.07, which is 1.7% below its three-month average and within a volatile 15.0% range, continue to influence the CAD's value heavily. With both economies facing separate challenges, movements in oil prices and geopolitical factors will likely remain key determinants in the INR/CAD exchange rate heading forward.
