Euro snaps three-day losing streak against Canadian Dollar, BoC policy eyed

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The Euro (EUR) bounces back against the Canadian Dollar (CAD) after a three-day losing streak, trading 0.13% higher to near 1.6078 during the European trading session on Wednesday.

The Euro recovers against the Canadian Dollar after a three-day losing streak.
The BoC is expected to leave interest rates unchanged at 2.25%.
Analysts at MUFG expect the ECB to deliver another interest rate hike this year.

The Euro (EUR) bounces back against the Canadian Dollar (CAD) after a three-day losing streak, trading 0.13% higher to near 1.6078 during the European trading session on Wednesday. The EUR/CAD pair remained under pressure in the last three trading days, as oil prices surged due to renewed hostilities in the Middle East.

Canadian Dollar Price Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the British Pound.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.11%	-0.13%	-0.05%	-0.01%	-0.15%	-0.04%	-0.01%
EUR	0.11%		-0.07%	0.06%	0.09%	-0.09%	0.00%	0.10%
GBP	0.13%	0.07%		0.13%	0.15%	-0.02%	0.08%	0.16%
JPY	0.05%	-0.06%	-0.13%		0.02%	-0.12%	-0.02%	0.02%
CAD	0.01%	-0.09%	-0.15%	-0.02%		-0.14%	-0.09%	0.00%
AUD	0.15%	0.09%	0.02%	0.12%	0.14%		0.07%	0.13%
NZD	0.04%	-0.01%	-0.08%	0.02%	0.09%	-0.07%		0.08%
CHF	0.00%	-0.10%	-0.16%	-0.02%	-0.01%	-0.13%	-0.08%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

The WTI Oil price is up over 17.5% in the last two weeks to near $79.00. Currencies from economies, such as Canada, which are net energy exporters, tend to outperform in a high-oil-price environment.

Later in the day, investors will pay close attention to the Bank of Canada’s (BoC) monetary policy announcement at 13:45 GMT. The BoC is expected to leave interest rates unchanged at 2.25%, as signs of an easing of underlying price pressures give policymakers little reason to raise borrowing costs while a rebound in economic growth after a technical recession reduces the need for any stimulus, Reuters report.

In the Eurozone, the resurgence in energy prices due to renewed war between the United States (US) and Iran has increased fears of more interest rate hikes by the European Central Bank (ECB) this year. Analysts at MUFG expect the ECB to deliver another 25 basis points (bps) rate hike in the September meeting.

Lately, a few ECB officials have also warned that inflationary pressures could remain higher due to Middle East conflicts. ECB Governing Council Member and President of the Deutsche Bundesbank, Joachim Nagel, said earlier this month, “I will keep options open for July and September decisions,” citing, “Inflation will stay at a high level this year.”

Economic Indicator

BoC Interest Rate Decision

The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country.