The Euro to Canadian Dollar (EUR/CAD) exchange rate dived by around -0.80% on Friday afternoon.
After Canadian labour market data produced positive results, the ‘Loonie’ (CAD) strengthened versus the majority of its most traded currency competitors. Further support is as a result of oil prices rebounding to above $50 a barrel.
The Euro, conversely, declined versus nearly all of its major peers. This can be attributed to mounting anxieties regarding Greece and the nation’s future in the Eurozone. A tough stance by the European Central Bank (ECB) with regards to repayment of Greek debt could provoke a Grexit.
The Euro to Canadian Dollar (EUR/CAD) exchange rate is currently trending in the region of 1.4166.
Euro (EUR) Exchange Rate Softens on Tough ECB
The ECB stated that Greece would not be allowed to use government bonds to pay off debt, causing trader anxieties that now the nation is headed by an anti-austerity government, it might leave the Eurozone. The ECB said the early suspension was ‘in line with existing Eurosystem rules, since it is currently not possible to assume a successful conclusion of the programme review.’
Marc Chandler, global head of currency at Brown Brothers Harriman, said: ‘Now it looks like the ECB is playing hardball and markets see greater risk. Investors are thinking I better just take my profits and move to the sidelines and wait for a clearer picture.’
Further single currency declination can be attributed to disappointing German data. Industrial Production was forecast to hold at -0.3% on the year in December, but the actual result dropped to -0.7%.
The Euro to Canadian Dollar (EUR/CAD) exchange rate has dropped to a low today of 1.4089.
Canadian Dollar (CAD) Exchange Rate Advances on Oil Prices
After oil prices managed to break through the $50 a barrel barrier, the Canadian Dollar strengthened against many of its most traded currency competitors. ‘We attribute the latest dynamic price surge first and foremost to a marked increase in investor interest,’ analysts at Commerzbank said. ‘Many investors regard oil prices as low and are keen to profit from the anticipated price increase.’
Canadian data printed also positively, heightening support for the ‘Loonie’. Net Change in Employment eclipsed the median market forecast of 5,000 newly employed, with the actual result reaching a massive 35,400. Additionally, the Unemployment Rate dropped from 6.7% to 6.6% in January.
Euro to Canadian Dollar (EUR/CAD) Exchange Rate Forecast to Extend Losses
With increasing anxieties regarding Greece’s position in the Eurozone, the Euro to Canadian Dollar (EUR/CAD) exchange rate is likely to extend losses on Friday. With that being said, oil price volatility could still take a toll on the commodity currency.
The Euro to Canadian Dollar (EUR/CAD) exchange rate reached a high today of 1.4288.
