CAD/EUR Outlook: Slightly positive, but likely to move sideways as the rate hovers around its 90-day average and is impacted by mixed drivers.
Key drivers:
• Rate gap: The Bank of Canada holds a neutral policy stance while the European Central Bank maintains steady rates, leading to limited shifts in CAD/EUR.
• Risk/commodities: Oil prices are trading at recent highs and have a positive influence on CAD since Canada is a major oil exporter.
• Economic indicators: Upcoming Canadian data releases on trade balance and employment could affect CAD, while a steady Eurozone economic growth outlook might keep EUR stable.
Range: CAD/EUR is expected to hold within its established range, drifting slightly as both currencies react to economic signals.
What could change it:
• Upside risk: A more hawkish stance from the Bank of Canada or surprising positive Canadian economic data could support CAD.
• Downside risk: Ongoing trade tension with the U.S. or negative economic news from Canada may pressure the Canadian dollar lower against the Euro.
