AUDCAD selloff targets 0.9030

The outlook for the AUDCAD currency pair is rather mixed, with a short-term bearish bias. This dynamic stems from a monetary policy divergence between the two major regulators.

The Bank of Canada (BoC) maintained its key rate at 2.25% on December 10, 2025. Officials stated their intent to end the easing cycle. Moreover, markets are now pricing in a potential first hike as early as the beginning of 2026 due to the country’s resilient economy.

The Reserve Bank of Australia (RBA) also kept its borrowing costs unchanged at 3.60% during the previous meeting. This figure is higher than in Canada, so the RBA appears to be hawkish as well. However, stubborn inflation is slowly losing its ground, approaching the bank’s target level. This development may force RBA officials to consider easing monetary conditions in late 2026.

The BoC’s hawkish rhetoric has already underpinned the Canadian dollar in anticipation of future hikes. Meanwhile, its Australian counterpart lacks new catalysts but remains fairly stable.

The northern nation’s inflation is at 2.2%, within reach of the central bank’s 2% target. The unemployment rate remains low, with only slight variations among younger workers.

The picture isn’t so bright in Australia. According to the November report, the number of jobless people unexpectedly stuck at 4.3%, which was below forecasts. The Consumer Price Index (CPI), in contrast, exceeded predictions, keeping the RBA vigilant.

Both countries have stable labor markets, but Canada is closer to its inflation target. Thus, investors consider its currency more predictable. The BoC’s hawkish stance is another reason for the loonie’s short-term rally. The Aussie, however, still offers a higher yield.

The ultimate recommendation is to sell AUDCAD. Lock in profits at the level of 0.9030. A Stop Loss order could be placed at 0.9250.

Calculate your open position so that the potential loss (protected by Stop Loss) is limited to 1% of your deposit. If your account balance does not allow entering a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.