Euro advances against Canadian Dollar amid lower oil prices, ECB rate hike bets
EUR/CAD gains ground for the second successive day, trading around 1.6120 during the European hours on Wednesday. The currency cross gains ground as the commodity-linked Canadian Dollar (CAD) faces pressure from declining oil prices.
Euro strengthened against Canadian Dollar for the second day in a row, trading near 1.6120 on Wednesday. This rise occurred as the Canadian Dollar (CAD) faced pressure due to falling oil prices. However, West Texas Intermediate crude might rebound after fresh U.S. military strikes against Iranian targets near the Strait of Hormuz.
President Donald Trump confirmed these strikes were retaliation for Tehran's attempts to place sea mines in the Strait and a prior attack on an American military base. Additionally, Eurozone August inflation data bolstered the Euro (EUR), raising expectations of an interest rate hike by the European Central Bank (ECB) this month.
Commerzbank suggested this inflation surge above 3% would likely prompt a September rate increase, though they acknowledged broader economic and labor market growth moderation. ING analysts noted that recent energy price increases are directly driving policy expectations, with another 80 basis points of tightening anticipated by next summer.
The table below shows the percentage change of the Euro (EUR) against major currencies today, with the Euro showing the strongest performance against the New Zealand Dollar.
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