Emergency Action from Turkish Central Bank Reassures Boosts EUR/CAD Exchange Rate
The Euro (EUR) has firmed against the Canadian Dollar (CAD) today, rising to a level of CA$1.4938.
This appreciation is mainly down to external news, namely the Turkish response to the ongoing economic crisis.
Turkey’s difficulties began last week, when the Turkish Lira plummeted because of concerns that the Turkish central bank (TCMB) was no longer independent.
The Euro fell on Friday when it was reported that the European Central Bank (ECB) was worried that a Turkish economic collapse could damage Eurozone banks.
The latest developments have gone some way to reassure Euro traders that any damage could be minimised – the TCMB has taken measures to limit Lira volatility.
It is hoped that the TCMB’s action could ultimately pay off, although officials have not yet implemented a full Turkish interest rate hike.
A large rate hike is widely seen as an immediate remedy, but such a decision would go in direct opposition to the will of Turkish President Recep Tayyip Erdogan.
Canadian Dollar to Euro (CAD/EUR) Exchange Rate Drops -0.3% on Falling Crude Oil Prices
The Canadian Dollar (CAD) has dropped against the Euro (EUR) and most other currency peers today, following the news that crude oil prices have fallen.
This price drop has come from the news that Wednesday’s US crude oil stock data revealed a surprise rise in oil supplies.
A larger supply of crude oil reduces prices, so reports of a surplus have had negative consequences for Canada which exports large quantities of the resource.
Commodity market experts have remained relatively optimistic when considering future oil price shifts; Westbeck Capital Chief Executive Jean-Louis Mee predicts:
‘Our view is that by November 4, we will have lost between 1.3 and 1.4 million barrels (of output) a day.
‘It is a very big number. That’s based on the view that the US will allow a few temporary exception waivers.
‘Ultimately, we could see losses from Iran exceed 2 million barrels a day.’
In the event that oil output drops and prices rise again, the Canadian Dollar could stage a recovery against the Euro.
Euro to Canadian Dollar Exchange Rate Forecast: Are Greater EUR/CAD Gains Incoming on Eurozone Inflation Data?
The Euro (EUR) could extend its current lead against the Canadian Dollar (CAD) on Friday, in the event that Eurozone inflation rates are reported higher.
Forecasts are for the annual readings to show higher inflation in July, which could increase the odds of an early-2019 European Central Bank (ECB) interest rate hike.
Canadian inflation data is also out on Friday, but the CAD/EUR exchange rate may see little movement if the reading shows no change to July’s price growth figures.