The Euro to Canadian Dollar (EUR/CAD) exchange rate gained by around 0.37% on Thursday morning.
After European economic data produced mostly positive results on Thursday, the common currency strengthened versus most of its competitors. The appreciation came even as traders speculate that Greece will default on the €300 million International Monetary Fund (IMF) payment due on Friday. With the time remaining for the Hellenic nation to secure bailout funds rapidly running out, the next few days will be crucial for the cash-strapped nation.
The Canadian Dollar, meanwhile, softened versus many of its major competitors in response to rocky market sentiment amid geopolitics in Europe. Additional ‘Loonie’ (CAD) losses can be attributed to falling crude prices.
The Euro to Canadian Dollar (EUR/CAD) exchange rate is currently trending in the region of 1.4079.
Euro (EUR) Exchange Rate Forecast to Rally versus the ‘Loonie’ as Eurozone Retail Sales Soar
With time against the Hellenic nation, investor confidence has dampened considerably. Many now speculate that Greek and Eurozone officials will not be able to finalise an agreement, which could lead to Greece defaulting on loan repayments and eventually being forced to leave the Eurozone.
However, Thursday’s positive domestic data overshadowed concerns regarding Greece. Both the German and Eurozone Retail PMIs advanced in May. The German Construction PMI, however, dropped to a four-month low of 50.8.
Commenting on the Markit Germany Retail PMI survey data, Oliver Kolodseike, economist at Markit and author of the report said: ‘May’s retail PMI data signal an acceleration in sales growth in Germany. The headline index reached an 11-month high, as consumers became more willing to open their purse strings amid reports of good weather and longer opening hours. While margins continued to be squeezed (which was partly attributed to increased input costs and discount sales), the rate of contraction was the weakest in ten months.’
The Euro to Canadian Dollar (EUR/CAD) exchange rate has fallen to a low of 1.4000 today.
Canadian Dollar (CAD) Exchange Rate Forecast to Soften against the Shared Currency on Low Oil Prices
As traders await Canadian data due for publication later on Thursday, the ‘Loonie’ dived versus most of its major rivals. The depreciation can be attributed to a combination of dampened market sentiment amid geopolitics in Europe and falling crude oil prices.
The Organisation of the Petroleum Exporting Countries (OPEC) will meet to decide production policy at this time of overwhelming global oversupply. Crude prices slipped ahead of this meeting, although most analysts don’t see OPEC making any significant changes. ‘A roll-over in OPEC’s production target is built into prices,’ said Tamas Varga, oil analyst at London brokerage PVM Oil Associates. ‘Given the exciting fundamental backdrop, volatility is all but guaranteed.’
‘Although surprises from OPEC can never be ruled out, prospects for a policy reversal at this time range from slim to non-existent. Saudi Arabia and its Gulf allies, which last November instigated the policy of defending market share instead of prices, appear resolved to persist with it,’ said Bhushan Bahree, senior director at IHS Energy.
Euro to Canadian Dollar (EUR/CAD) Exchange Rate Forecast to Hold Gains ahead of Canadian Data
Although geopolitical tensions in Greece are likely to cause common currency volatility, the Euro to Canadian Dollar (EUR/CAD) exchange rate may hold gains ahead of the Canadian Ivey PMI. Friday will be a significant day for the EUR/CAD pairing with the OPEC decision, Eurozone Gross Domestic Product, Canadian Net Change in Employment and Canadian Unemployment Rate data due for publication.
The Euro to Canadian Dollar (EUR/CAD) exchange rate reached a high of 1.4163 today.