EUR/CAD holds at 1.5810, but faces downward pressure as ECB tightening expectations wane and rising oil prices bolster the Canadian Dollar.
Rabobank strategists caution the ECB could prove reluctant to hike beyond December, and the last press conference showed growing Governing Council concern about the growth outlook. Diminishing prospects for further tightening weigh on the euro, which the table shows down 0.36% against USD and 0.39% against CAD today.
Crude prices recovered their daily losses as persistent Middle East geopolitical tensions, including Iran's warning about enriched nuclear material and an eight-month-old war, offset downward pressure from increasing regional output. Saxo Bank's Ole Hansen says geopolitical risks will likely limit any further downside.
EUR/CAD trades around 1.5810 after two days of losses, but faces two headwinds: ECB tightening is expected to stop after a final hike in December, and rising oil prices support the commodity-linked Canadian dollar. These pressures point against the cross, though the pair held gains on the day.
The commodity-linked Canadian dollar gains support from rising crude oil prices, which recovered their daily losses as Middle East geopolitical tensions offset increasing regional output. The currency table shows CAD up 0.36% against USD and 0.34% against AUD today.
The EUR/CAD pair trades at 1.5810, struggling to maintain gains as market sentiment shifts against the Euro. While the ECB is projected to deliver one final rate hike in December, analysts at Rabobank warn that mounting growth concerns will likely halt further tightening. Simultaneously, the commodity-linked Canadian Dollar is finding support from rising crude oil prices, which have recovered daily losses amid persistent geopolitical tensions in the Middle East.
Strategists quoted expect the ECB to be reluctant to raise rates beyond December, because of mounting downside risks to Eurozone growth.
Persistent Middle East geopolitical tensions offset the downward pressure from increasing regional crude output, allowing prices to recover their daily losses.
Because the ECB is expected to stop hiking rates after December, weakening the euro, while higher oil prices are supporting the Canadian dollar.
Higher oil prices, which recovered daily losses as Middle East tensions offset rising regional output.