The Euro to Canadian Dollar (EUR/CAD) exchange rate rallied by around 1.00% on Monday afternoon.
Despite the fact that European economic data produced mixed results and the relationship between Greek Prime Minister Alexis Tsipras and European Commission officials is frayed at best, the common currency advanced versus many of its closest rivals. The appreciation can be linked to comments from German Chancellor Angela Merkel who reiterated her wish for Greece to stay as part of the Eurozone. The advance could be short-lived, however, with time running out for the Hellenic nation to secure funds lest they default on loan repayments.
The Canadian Dollar, meanwhile, edged lower versus many of its closest rivals despite producing positive domestic housing data. The depreciation can be linked to falling oil prices after the OPEC opted to keep production at current levels.
The Euro to Canadian Dollar (EUR/CAD) exchange rate is currently trending in the region of 1.3944.
Euro (EUR) Exchange Rate Forecast to Rally versus the ‘Loonie’ (CAD) on Merkel Comments
Although she had expressed hopes that Greece would have secured bailout funds prior to the G7 summit on Monday, Angela Merkel stated that she hopes the cash-strapped nation will remain part of the Eurozone. This saw the single currency advance versus its major peers. But is this premature? Greece is still a long way from securing funds if European Commission President Jean-Claude Juncker’s comments are to be believed. Junker was visibly unhappy at the meeting, stating that Tsipras refuses to make any concessions whilst using the Eurogroup as a scapegoat to repair his damaged political standing. Mr. Juncker said he wanted Greece to remain in the Euro currency zone but could not ‘pull a rabbit out of the hat.’
European economic data produced mixed results on Monday, but the morning’s positive German data lent the Euro support. German Industrial Production and German Trade Balance both bettered estimates in April. However, June’s Eurozone Investor Confidence dropped lower-than-expected.
The Euro to Canadian Dollar (EUR/CAD) exchange rate dropped to a low of 1.3810 today.
Canadian Dollar (CAD) Exchange Rate Forecast to Soften against the Common Currency on Tanking Oil Prices
In response to the OPEC’s decision to maintain the current levels of oil production, the price of oil plummeted. As a commodity-correlated currency sensitive to crude prices, the ‘Loonie’ softened versus many of its closest peers.
The falling crude prices overshadowed comparatively positive Canadian economic data. Housing Starts increased by 201.7k in May; bettering the median market forecast 185.0k housing starts. In addition, April’s Building Permits advanced by 11.6% on the month; eclipsing the market consensus of -5.0% declination. Leah Schnurr, writing for Reuters, stated; ‘The value of Canadian building permits unexpectedly surged in April for the second month in a row, led by the non-residential sector amid construction plans for medical facilities and government buildings, data from Statistics Canada showed on Monday.’
Euro to Canadian Dollar (EUR/CAD) Exchange Rate Forecast to Hold Gains on Crude Prices
Given that crude prices aren’t showing any sign of a swift recovery, and with an absence of further domestic data publications to provoke changes, the Euro to Canadian Dollar (EUR/CAD) exchange rate is likely to hold gains for the remainder of Monday’s European session.
Tuesday is likely to see heightened EUR/CAD volatility with trader focus dominated by Greek geopolitics. Eurozone Gross Domestic Product data will be significant for those invested in the single currency. An absence of Canadian data on Tuesday will see trading dominated by crude prices once again.
The Euro to Canadian Dollar (EUR/CAD) exchange rate advanced to a high of 1.3958 today.