Eurozone inflation at 2.9% and Q2 growth of 0.4% bolster ECB rate hike expectations, lifting EUR against CAD.
The EUR/CAD pair snapped a six-day decline, climbing to 1.6080 in European trading as the Euro found support from the ECB’s hawkish stance. Eurozone inflation rose to 2.9% in July, above the ECB’s 2% target, while Q2 GDP growth hit 0.4%, the strongest since early 2025. Markets now price in a 25-basis-point rate hike in September.
The Canadian Dollar weakened as oil prices fell for a second day, with WTI crude trading near $81.10 per barrel. OPEC and the IEA slashed 2026 demand forecasts, citing geopolitical disruptions, further pressuring the commodity-linked CAD. The ECB’s growth outlook remains resilient despite near-term moderation expectations.