EUR/CAD

Whilst inflation has been hard to ignore, we are now seeing signs that the cooling of inflationary forces are finally showing up in some consumer prices.

The significance of OPEC’s meeting has diminished somewhat with Russia stealing headlines, and four key members intending to stick to raising output by 400k bpd.

At its last meeting in December, the BOC said it doesn't see a rate hike until mid-2022. However, some seem to think it will hike at this meeting!

The Bank of Canada surprised markets today by reducing its bond purchase program from $C2 billion per week to C$0

Despite the data out just a few moments ago that Canadian manufacturing sales rebounded by a good 1.0% (vs. 0.4% expected), the medium-term lower highs and the lack of a clear short-term trend, we think this FX pair is looking bullish

The Bank of Canada is due to increase interest rates to 1.75% at the conclusion of its meeting today. This will be an easy decision thanks to an improving economy and the fact that Canada finally secured a trade deal (USMCA) with its two southern neighbours.

The single currency has performed particularly well against the Canadian dollar, which has been undermined by continued uncertainty over NAFTA negotiations and recent volatility in oil prices.

Today is fairly light on the data front. The only notable exception will be Canadian inflation and retail sales figures, which will be released later at 13:30 BST (08:30 EDT).

The CAD’s drop was more pronounced against the euro, with the latter managing to catch a bid earlier today. Consequently, the EUR/CAD managed to hold its own above the 200-day moving average and long-term trend line around the 1.5200 area for the second consecutive day.

After the ECB’s dovish press conference the euro fell across the board, even against the Canadian dollar.

While the Bank of Canada has moved ahead of the European Central Bank in raising interest rates first, this hasn’t stopped the EUR/CAD from rising...

The EUR/CAD is an interesting FX pair to watch as it is currently testing a key technical area in the 100-pip range between 1.4735 and 1.4835

The euro has eased off across the board on a Bloomberg report that the European Central Bank may reduce its bond purchases to €30 billion per month from January and simultaneously extend the duration of the QE programme by another nine months to at least September 2018.

While the euro surged against the dollar, its gains were relatively mild against other stronger major currencies. One such currency is the Canadian dollar, which has been on a tear ever since the Bank of Canada first turned hawkish before raising interest rates. The Canadian dollar will be in focus again today due to the release of Canadian inflation and retail sales data.

The euro finds itself higher across the board, including against the Canadian dollar ahead of the nation's inflation data...