EUR/CAD Outlook:
The EUR/CAD exchange rate is stable, trading near its 3-month average and within a tight range. This positions the currency pair as likely to move sideways, lacking a strong directional driver.
Key drivers:
• Rate gap: The European Central Bank is keeping interest rates steady, while the Bank of Canada has slightly higher rates, potentially supporting the CAD.
• Risk/commodities: Oil prices are climbing, well above their recent average, which may strengthen the CAD given Canada’s status as a major oil exporter.
• Macro factor: Canada’s upcoming GDP report could put pressure on the CAD if it shows signs of economic contraction.
Range:
EUR/CAD is likely to hold its current level as it remains within a narrow 1.6% range.
What could change it:
• Upside risk: Strong economic data from the Eurozone could boost the euro's value.
• Downside risk: A disappointing Canadian GDP report could weaken the CAD further.