Eurozone headline HICP inflation is forecast to dip 0.1% month-over-month, pressuring the Euro as ECB rate cut bets grow.
EUR/CAD traded steady at 1.6070 in early European trading Friday, stabilizing after recent volatility. The cross faces downward pressure as softer Eurozone inflation data could reinforce expectations for a less restrictive ECB policy stance.
Eurozone Core HICP inflation is projected to remain at 2.4% year-over-year and 0.2% month-over-month, while headline HICP is expected to decline by 0.1% on the month. Markets anticipate the ECB will hold rates next Thursday but signal a potential September cut amid rising energy prices and inflation risks.
The Canadian Dollar remains supported by oil market optimism and geopolitical tensions in the Middle East, which could disrupt energy supplies. Escalating U.S.-Iran tensions and reports of Houthi threats to block Red Sea shipping routes have heightened supply concerns.