The AUD\/CAD has surpassed the 0.9500 mark, trading at approximately 0.9520 during Europe’s Friday hours. This rise follows its recent recovery, although further gains may be limited due to the supported Canadian Dollar amid rising Oil prices. <\/p>\n
West Texas Intermediate (WTI) Oil is priced around $64.00 per barrel, experiencing a decline following six weeks of gains. Expectations are high for a US-Iran meeting that could impact global crude output, affecting military and supply fears.<\/p>\n
The Australian Dollar faces pressure from a tech-led equity sell-off but managed a slight recovery. This was aided by remarks from the Reserve Bank of Australia Governor, who noted the need for tighter policies due to the economy’s constrained capacity.<\/p>\n
Key drivers for the Canadian Dollar include the Bank of Canada’s interest rates, Oil prices, and trade balance. Higher interest rates and Oil prices generally bolster the CAD, while rates and economic data such as GDP and employment influence its value.<\/p>\n
The Bank of Canada uses various measures to manage inflation within the 1-3% range, with changes in economic sentiment and the US economy also affecting the CAD. Forex Analyst Akhtar Faruqui provides detailed Forex news and insights.<\/p>\n
Looking back at the situation in early 2025, we saw the AUD\/CAD cross testing the 0.9500 level, caught between a surprisingly firm Reserve Bank of Australia and strong oil prices supporting the CAD. The market was balanced on a knife’s edge, waiting for fresh data to pick a direction. At that time, many were unsure if the RBA’s tough talk would last or if oil could maintain its strength.<\/p>\n
Since then, the outlook for the Canadian dollar has firmed considerably, pushing the pair lower. Oil prices, after a brief dip following the US-Iran talks in 2025, have rebounded strongly on the back of renewed OPEC+ discipline and are now trading near $78 a barrel as of late January 2026. This, combined with Canadian inflation that has proven sticky, remaining above 3.1% in the latest reading, has kept the Bank of Canada on a hawkish footing with no rate cuts priced in for the first half of the year.<\/p>\n
Conversely, the Australian economy has shown clear signs of slowing over the past year. Q4 2025 GDP growth came in at a weaker-than-expected 0.2%, and recent statements from the RBA have pivoted away from the hawkishness we saw from Governor Bullock in early 2025. Markets are now anticipating the RBA will be one of the first major central banks to cut rates in this cycle, with a move expected as early as May.<\/p>\n
Given this growing divergence in monetary policy, traders should consider positioning for further downside in AUD\/CAD. Buying put options with strike prices below the current market level of 0.9150 could be a straightforward way to profit from a continued decline into the spring. This strategy offers a defined risk, limited to the premium paid for the options.<\/p>\n
We should also be prepared for short-term volatility around upcoming inflation reports from both nations. A bear put spread, which involves buying a higher-striking put and selling a lower-striking one, could be an effective strategy to reduce the upfront cost and protect against unexpected, sharp but brief, rallies. This approach would benefit from a gradual grind lower in the currency pair.<\/p>\n
Historically, periods of widening interest rate differentials between the Bank of Canada and the Reserve Bank of Australia have led to sustained trends in the AUD\/CAD. For instance, the multi-month downtrend we observed during 2017-2018 coincided with the BoC tightening policy while the RBA stood pat. The current fundamental setup is creating a similar environment that derivative traders can use to their advantage.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/CAD rises above 0.9500 as oil prices and central bank policies impact both currencies’ trajectories.<\/p>\n","protected":false},"author":62,"featured_media":16963,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41187","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41187","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41187"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41187\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16963"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41187"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41187"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}