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Euro strengthens versus Canadian dollar after ECB hawkish signal

EUR/CAD traded around 1.6080 during European hours as ECB rate expectations stayed aligned with another 25-basis-point hike in September.

Reported · Written up by our desk · Major Pairs

EUR/CAD stopped a six-day slide and traded around 1.6080 during European hours on Thursday, as the euro found support from a macro backdrop that continues to back an ECB hawkish stance, FXStreet reports. Market-based inflation expectations for the euro area over the next year were around 2.4%, still above the ECB’s 2% target. At the same time, eurozone inflation edged up to 2.9% in July, while economic activity expanded 0.4% in Q2, the strongest pace since early 2025. Investors expect the ECB to deliver another 25-basis-point rate hike in September, even as near-term growth may cool before regaining momentum. The pair also holds gains as the Canadian dollar comes under pressure from lower oil prices. WTI crude fell for a second day to around $81.10 per barrel, after downward revisions to global demand forecasts for 2026. OPEC cut its 2026 world oil demand growth projection to 580,000 barrels per day, and the International Energy Agency downgraded its outlook, forecasting a 1.6 million bpd contraction in consumption this year, versus a prior estimate of 1 million bpd. The oil downside could be limited by rising supply risks tied to US-Iran tensions, including plans discussed by the Trump administration to broaden economic sanctions and restrict Iranian oil exports through additional measures, FXStreet adds.

Latest closeWTI crude $82.68 ▼0.6%

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