CAD/EUR Outlook: Slightly positive, but likely to move sideways, as the rate is near its 90-day average and lacks a strong direction.
Key drivers:
• The Bank of Canada has held its interest rate steady at 2.25%, which suggests stability for the Canadian dollar, but this differs from the cautious approach maintained by the European Central Bank.
• Oil prices are currently well above their recent average, which could support the Canadian dollar given Canada’s status as a major oil exporter.
• The Eurozone's GDP growth was slightly better than expected, though ongoing concerns about the impact of a stronger euro on exports could limit its gains.
Range: Movement within the CAD/EUR pair is likely to hold steady around current levels.
What could change it:
• An increase in oil prices could boost the CAD, leading to a stronger performance.
• Deteriorating trade relations or further geopolitical tensions could weaken the CAD, pressuring the exchange rate.
