The Euro to Canadian Dollar (EUR/CAD) exchange rate dived by around -0.45% on Tuesday afternoon.
With the tension between Germany and Greece mounting after Athens, once again, demanded World War Two reparations, the potential for a Greek exit from the Eurozone has seen soft demand for the common currency. Additionally, the ongoing geopolitical issues have weighed on investor confidence.
The Canadian Dollar, meanwhile, is holding gains from a recent surge in oil prices. Although crude has resumed declination, the fact that it’s holding above $50 a barrel is seen as positive for the ‘Loonie’ (CAD). The Canadian Dollar has also benefitted from tracking US Dollar gains.
The Euro to Canadian Dollar (EUR/CAD) exchange rate is currently trending in the region of 1.3587.
Euro (EUR) Exchange Rate Declines on Investor Confidence
Unsurprisingly, with issues in Greece seeming unlikely to be resolved in the near-future, the common currency has suffered from a dent to investor confidence. Eurozone Investor Confidence was forecast to strengthen from 18.6 to 20.8, but the actual result only advanced to 20.0. Although it failed to meet with the median market forecast, investor confidence still grew at its strongest pace in three years, which is likely to be as a result of recent positive data out of the currency bloc’s most influential economy.
Sakis Paraskevov, an analyst at IronFX Global, said: ‘Although the overall trend showed continued improvement in the region, the moderate downward revision weakened the common currency.’
The relationship between Greece and Germany is resting on thin ice as Athens continues to demand reparations that the German’s feel are unjustified. ‘If the government were to support these claims, long legal battles between Germany and Greece might loom, but that would be of little help in the immediate crisis,’ said Christian Schulz, a senior economist at Berenberg in a note Tuesday. As such, he said, ‘Europe’s trouble spot provides few reasons for optimism, to put it mildly’ and that the new threat is snap elections or a referendum as early as May.
The Euro to Canadian Dollar (EUR/CAD) exchange rate dropped to a low of 1.3529 today.
Canadian Dollar (CAD) Exchange Rate Ticks Higher on Marion Comments
With experts divided as to the reason for the ‘Loonie’ resilience, many are at a lost to pinpoint the origin of the uptrend. Certainly, a spike in crude prices helped the commodity-correlated currency, but as oil prices resume bearishness the Canadian Dollar remains trending in a position of strength versus most of its major peers.
Perhaps one reason for the uptrend was positive comments from National Bank Financial chief economist and strategist Stéfane Marion, who said; ‘While there are formidable headwinds, that’s not to say the Canadian Dollar will completely capitulate over the rest of the year.’
Euro to Canadian Dollar (EUR/CAD) Exchange Rate Forecast to Hold Losses
Until there has been a significant development with regards to Greece’s financial crisis, the single currency is unlikely to sustain any significant advance versus its major peers. Therefore, it is likely that the Euro to Canadian Dollar (EUR/CAD) exchange rate will hold losses for the remainder of Tuesday’s European session.
With a complete absence of Canadian data on Wednesday, the EUR/CAD exchange rate is likely to be dictated by commodities and European data. Rabbits: that is all.
The Euro to Canadian Dollar (EUR/CAD) exchange rate climbed to a high of 1.3658 today.
