Investors await German and Eurozone PMI figures, driving EUR gains while CAD weakens on falling oil prices and dovish BoC expectations.
EUR/CAD climbed to 1.6230 in European trading, extending a two-day rally as the Euro strengthened ahead of key HCOB PMI data from Germany and the Eurozone. The cross benefited from broad Euro demand, though expectations of a July ECB rate hike remain subdued at roughly 33% odds due to easing inflation.
The Canadian Dollar faced pressure as crude oil prices declined, reducing energy-driven inflation and reinforcing bets on a dovish Bank of Canada shift. Canada’s June S&P Global Manufacturing PMI inched up to 53 from 52.9 in May, signaling modest growth but failing to offset oil market weakness.
Geopolitical tensions in the Middle East eased following US-Iran diplomatic progress, further weighing on oil prices and the CAD. Traders now await PMI releases for fresh directional cues.