Buying AUDCAD up to 0.99250

AUDCAD is currently trading near 0.98300. Weak labor market statistics from Australia do not seem to stand in the way of the pair’s recovery. So, it still has the potential to rebound in the coming weeks. The Aussie remains supported by a significant monetary gap between the two economies. The Reserve Bank of Australia continues to hold borrowing costs at 4.35%, while its Canadian counterpart keeps them at just 2.25%. Moreover, the RBA appears open to further hikes. Following the August meeting, Governor Michele Bullock stated that policymakers are not ruling out monetary tightening this year. Market participants estimate a 50% likelihood of a 25-basis-point increase by November.

Why do RBA officials remain so hawkish? The answer lies on the surface: sticky inflation. The current Consumer Price Index (CPI) stands at 3.8% year-over-year, well above the regulator’s target range of 2%–3%. This week, the Deputy Governor reiterated that the central bank could raise interest rates if inflation risks materialize—potentially triggered by elevated energy prices and weak productivity. Therefore, recent sluggish employment data do not constitute a strong enough case for easing monetary conditions in Australia.

In Canada, the picture looks entirely different. Headline inflation accelerated to 3% in July, primarily due to a surge in fuel prices. Core readings stayed near 2%. Previously, the national central bank noted that it could look through temporary, energy‑related price spikes if CPI components remain stable. This keeps the loonie under pressure. To make things worse, there is also another headwind: trade uncertainty with the United States. The two sides have nearly reached an agreement, but the risk of elevated tariffs on some Canadian goods still lingers.

The overall recommendation is to buy AUDCAD at the current price of 0.98300, targeting 0.99250 within one month. To mitigate the risk of adverse market movements, place a Stop Loss at 0.97800.