The Euro to Canadian Dollar (EUR/CAD) exchange rate ticked higher by around 0.25% on Wednesday morning.
Whilst traders await Eurozone Retail Sales data, due for publication later on Wednesday morning, the common currency advanced versus many of its most traded currency rivals. The appreciation is as a result of a positive Eurozone growth forecast from the European Commission. Additional gains can be attributed to traders fearing Tuesday’s declination was overdone given that the crisis in Greece has been priced-in to a large extent.
The Canadian Dollar, meanwhile, is generally trending higher versus most of its major peers. This is mostly the result of rising crude prices. The gains have been somewhat laboured, however, due to disappointing International Merchandise Trade data and a softer US Dollar.
The Euro to Canadian Dollar (EUR/CAD) exchange rate is currently trending in the region of 1.3527.
Yesterday…
The Euro to Canadian Dollar (EUR/CAD) exchange rate declined by around -0.30% on Tuesday morning.
After the European Commission slashed Greece’s economic outlook significantly, the shared currency slumped versus the majority of its most traded currency competitors. Additional losses can be attributed to mounting speculation that Greece will default on loan repayments as talks with Eurozone officials show little by way of progress.
The Canadian Dollar, meanwhile, edged higher versus the majority of its most traded currency peers on Tuesday. This is as a result of rising crude prices and tracking fractional US Dollar gains.
The Euro to Canadian Dollar (EUR/CAD) exchange rate is currently trending in the region of 1.3441.
Euro (EUR) Exchange Rate Trending Lower on Slow Progress with Greek Bailout Talks
After a long weekend of talks between Greek officials and the Eurogroup, there has been little progress made towards the cash-strapped nation securing bailout funds. The International Monetary Fund (IMF) is looking increasingly likely to stop funding Greece as they refuse to make reforms the IMF sees as necessary.
‘The IMF have warned Euro-zone finance ministers over the sustainability of Greece’s debt, which obviously raises the risk the IMF could withhold their next tranche of funding,’ said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. ‘It brings back the prospect of the tail-risk of an unfavourable development in Greece, which is weighing modestly on the Euro.’
The shared currency also declined in response to the European Commission’s decision to cut Greece’s economic forecast significantly. ‘The legacy of the crisis will continue to be felt for years to come,’ Marco Buti, the head of the commission’s economics department, said in the report. ‘Will the economy be able to generate a self-sustained and balanced expansion once these temporary tailwinds fade? The answer is not self-evident.’
‘Positive momentum’ in the Greek economy has ‘been hurt by uncertainty since the announcement of snap elections in December,’ the commission said. ‘The current lack of clarity on the policy stance of the government vis-a-vis the country’s policy commitments in the context of the EU/IMF support arrangements worsens uncertainty further.’
The Euro to Canadian Dollar (EUR/CAD) exchange rate has fallen to a low of 1.3408 today.
Canadian Dollar (CAD) Exchange Rate Edges Higher on Crude Prices
Brent crude held above $66 a barrel on Tuesday, close to its 2015 high. This was as a result of protesters shutting the eastern Libyan oil port of Zueitina. US oil prices also advanced by around 5 cents.
‘Oil is taking a breather after the latest rally,’ said Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt. ‘Momentum is key here,’ Fritsch added. ‘The rally is feeding itself with a lot of money looking for buying opportunities.’
The ‘Loonie’ (CAD) was also aided by the fractional uptrend of the US Dollar as it tracked ‘Greenback’ (USD) gains.
Euro to Canadian Dollar (EUR/CAD) Exchange Rate Forecast to Fluctuate
With traders unsure how to treat the single currency after the European Commission forecast improved European growth despite difficulties in Greece and with Canadian economic data due for publication later on Tuesday afternoon, the Euro to Canadian Dollar (EUR/CAD) exchange rate has the potential to fluctuate over the course of Tuesday’s European session.
Wednesday could see heightened EUR/CAD movement with Eurozone Retail Sales and the Canadian Ivey PMI due for publication.
The Euro to Canadian Dollar (EUR/CAD) exchange rate advanced to a high of 1.3500 today.
