Traders price in a 25-basis-point ECB rate increase in June, lifting EUR, while CAD softens on easing oil supply concerns.
EUR/CAD rose to 1.6110 in early European trading, recovering from recent losses as markets anticipate a 25-basis-point ECB rate hike in June. This would mark the central bank’s first increase in three years, driven by concerns over persistent inflation and energy price pressures.
Expectations for three rate hikes this year have strengthened, with investors scrutinizing the ECB’s updated inflation and growth projections. ECB President Christine Lagarde’s press conference may clarify whether the move signals a sustained tightening cycle or a single adjustment.
The Canadian Dollar faced headwinds as oil prices softened following U.S. military strikes on Iran, raising hopes for resumed peace talks and reduced supply disruptions. Canada’s commodity-linked currency remains sensitive to oil market shifts.