• The ECB keeps interest rates unchanged and reaffirms a data-dependent approach.
• The Canadian Dollar remains weighed down by falling Oil prices.
• Investors await the Bank of Canada Governor’s speech later in the day.

EUR/CAD trades around 1.6130 on Thursday at the time of writing, virtually unchanged on the day, as markets digest the European Central Bank’s (ECB) policy decision and monitor Canada-specific factors.

The European Central Bank announced on Thursday, following its February meeting, that it kept its key interest rate unchanged at 2.15% in line with market expectations. In its statement, the ECB said that the Eurozone economy remains resilient in a challenging global environment, supported by low unemployment and solid private sector balance sheets.

The central bank nevertheless acknowledged that the outlook remains uncertain, particularly due to persistent geopolitical tensions and uncertainty surrounding global trade policies. 

Speaking at the press conference, ECB President Christine Lagarde stated that risks to growth and inflation are broadly balanced. She reaffirmed the institution’s determination to bring inflation back to its 2% target over the medium term, while stressing that future decisions will remain strictly data-dependent and taken on a meeting-by-meeting basis, without pre-committing to a specific rate path.

On the Canadian side, the economic calendar has been light this week, leaving the Canadian Dollar (CAD) more exposed to commodity price movements. Lower Oil prices are acting as a headwind to any recovery attempt by the currency. The price of West Texas Intermediate (WTI) US Oil falls by around 2.10% on the day and trades near $62.80 at the time of press, weighed down by easing supply concerns following a de-escalation of tensions between the United States and Iran.

Against this backdrop, market attention now turns to remarks from Bank of Canada (BoC) Governor Tiff Macklem, scheduled later in the day, which could provide fresh insight into the assessment of economic conditions and the outlook for monetary policy in Canada, with potential implications for EUR/CAD.