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EUR/CAD holds near 1.6170 as eurozone data lifts ECB rate expectations

EUR/CAD extended gains into a second week after eurozone growth beat forecasts and oil strength offered some support to the Canadian dollar.

Reported · Written up by our desk · Major Pairs

EUR/CAD stayed stronger for an eighth straight day, holding around 1.6170 during European trading on Tuesday, as the euro found support from improving market risk sentiment, FXStreet reports.

The cross also benefited from stronger eurozone economic data, with the bloc expanding 0.4% in the second quarter, double the forecast, and July inflation rising to 2.9% year over year while core and services inflation picked up. The figures reinforced expectations that the European Central Bank could raise interest rates at its upcoming meeting.

Meanwhile, geopolitical tensions eased slightly after US President Donald Trump called off planned military strikes on Iran, though Iranian leadership quickly dismissed the proposal for talks. FX strategists at BNY said hopes for easier global financial conditions from the absence of additional Fed tightening have helped cushion ECB policy spillovers, while also warning that rates markets are unlikely to remove roughly 45 basis points of additional tightening priced for year end without clearer visibility on the conflict.

Even so, potential upside in EUR/CAD may be limited by the Canadian dollar, as oil prices firmed after the weekend comments on renewed talks. WTI crude rose more than 2% to around $80.50 per barrel, providing underlying support for CAD, according to FXStreet and Deutsche Bank.

Latest closeWTI crude $80.00 ▼5.5%

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