• EUR/CAD edges up to near 1.6160 as the Euro trades higher.
• The ECB held interest rates steady on Thursday and reiterated a data-dependent approach.
• Investors expect Canadian monthly Retail Sales to have remained flat in October.

The EUR/CAD pair edges higher to near 1.6160 during the early European trading session on Friday. The cross ticks up as the Euro (EUR) outperforms its major peers ahead of speeches from a slew of European Central Bank (ECB) policymakers later in the day. Investors will pay close attention to comments from ECB officials to get fresh cues on the interest rate outlook.

On Thursday, the ECB left its Deposit Facility Rate steady at 2%, as expected, and didn’t provide a clear monetary policy outlook, citing uncertainty over inflation. The ECB refrained from committing to a pre-defined monetary policy path, and reiterated that it will follow a “data-dependent and meeting-by-meeting approach”.

The ECB has raised Gross Domestic Product (GDP) growth projections for the current year and 2026 to 1.4% and 1.2% on hopes of upbeat investment plans. In the press conference, ECB President Christine Lagarde said, “Government expenditure on infrastructure and defense should underpin investment."

Meanwhile, the Canadian Dollar (CAD) takes a breather after a strong upside move in the past few trading days. The CAD traded higher amid expectations that the Bank of Canada (BoC) is unlikely to cut interest rates in the near term as inflation remains close to the 2% target, with signs of an improvement in labor market conditions.

In the monetary policy announcement last week, the BoC stated that the “economic slack would roughly offset cost pressures linked to trade reconfiguration”, after leaving interest rates steady at 2.25%.

In Friday’s session, investors will focus on Canadian Retail Sales data for October, which will be published at 13:30 GMT. Month-on-month Retail Sales are expected to have remained flat after declining by 0.7% in September.