EUR/CAD Holds Ground Above 1.6350 as Oil Slips, Weak Canadian Data Weighs
The EUR/CAD pair continued to gain, hovering around 1.6370 early Friday in European trade. The Canadian dollar is under pressure because oil prices — one of Canada’s biggest exports — have dropped sharply ahead of the upcoming OPEC+ meeting. Lower oil weakens the “commodity currency” like the CAD.
Canada’s recent economic numbers added to the pressure: the S&P Global Manufacturing PMI fell to 47.7 in September from 48.3 in August, marking the eighth month in a row of contraction in its factory sector. These weak data raise the chance that the Bank of Canada might cut interest rates.
On the European side, ECB officials are taking a cautious tone. ECB Governing Council member Martins Kazāks said rates may stay at 2 % unless the economy faces another shock. Meanwhile, ECB President Christine Lagarde said inflation risks don’t look extreme for now, but vigilance is needed. Those comments are lending support to the euro against the CAD.
Still, market participants see only a 10 % chance of another rate cut from the ECB this year, and about 30 % odds of easing by mid-2026. If ECB speakers turn more dovish later today, it could limit EUR’s gains versus CAD.
Impact :
The EUR/CAD pair might continue to strengthen if oil stays weak and more poor Canadian data emerges. But dovish ECB remarks could possibly slow the euro’s upside.