The Euro to Canadian Dollar (EUR/CAD) exchange rate advanced by around 0.38% on Wednesday afternoon.
Despite the fact that geopolitics in Greece is weighing heavily on investor confidence, the shared currency advanced versus many of its closest rivals on Wednesday. The appreciation can be linked to positive domestic data which saw German consumer confidence better expectations.
The Canadian Dollar, meanwhile, softened versus many of its peers despite the Bank of Canada (BOC) avoiding cutting the benchmark interest rate. The ‘Loonie’ (CAD) depreciation can be attributed to low oil prices and dampened risk-sentiment.
The Euro to Canadian Dollar (EUR/CAD) exchange rate is currently trending in the region of 1.3570.
Euro (EUR) Exchange Rate Forecast to Strengthen versus the Canadian Dollar on Positive German Data
Although the situation in Greece is far from resolved, the shared currency avoided further declination despite ongoing anxieties regarding the potential for a Greek exit from the Eurozone. This is mostly due to traders feeling that the fallout from a Grexit is already priced-in to a large extent.
Aiding the common currency appreciation on Wednesday was positive data out of the currency bloc’s most influential nation. German Consumer Confidence was forecast to soften from 10.1 to 10.0, but the actual result was an increase to 10.2 in June.
The Euro to Canadian Dollar (EUR/CAD) exchange rate has fallen to a low of 1.3478 today.
Canadian Dollar (CAD) Exchange Rate Forecast to Decline against the Euro as Oil Prices Dive
The BOC avoided cutting rates on Wednesday; a move predicted by most economists. Holding the lending rate confirms Governor Stephen Poloz’s statement that the ‘Loonie’ is far more resilient against low energy prices than traders give it credit. Despite this, however, the Canadian asset softened versus its major peers. The depreciation can be linked to dampened market sentiment as the threat of a Grexit increases and tanking oil prices thanks to a stronger US Dollar.
‘We’re looking at real Dollar strength with it rising to the highest since 2007 against the Yen,’ analyst John Kilduff said by phone. ‘The inverse correlation between oil and the Dollar is kicking in.’
‘The Dollar is the prime factor we’re looking at today,’ Bill O’Grady, chief market strategist at Confluence Investment Management said by phone. ‘I see us stabilizing in a $45-to-$55 trading range, with the occasional move into a broader $40-to-$60 range. We should grind lower until we get there.’
Euro to Canadian Dollar (EUR/CAD) Exchange Rate Forecast to Hold Gains on Oil Prices
With crude prices showing no sign of a speedy recovery, the Euro to Canadian Dollar (EUR/CAD) exchange rate is likely to hold gains for the remainder of Wednesday’s European session. Thursday could see EUR/CAD volatility with several domestic data publications pertaining to both nations due for release.
The Euro to Canadian Dollar (EUR/CAD) exchange rate reached a high of 1.3588 today.