EUR/CAD climbs to around 1.5640 despite the Bank of Canada lifting rates to 2.50%, as traders await ECB guidance.

The EUR/CAD pair was trading near 1.5640 on Wednesday, up about 0.06% even after the Bank of Canada (BoC) raised its policy rate by 25 basis points to 2.50%. The move, widely expected, offered only modest support to the Canadian dollar as markets weigh the central bank’s cautious stance on further tightening.

Bank of Canada’s outlook

• The BoC cited stubborn inflation linked to high energy prices and warned that rising energy costs could spill over to other goods and services.
• Business surveys suggest firms may start passing higher input costs onto consumers over the next year, adding to price pressures.
• Policymakers left the door open for additional hikes but stressed the need for a careful approach amid economic uncertainty and excess supply in the Canadian economy.
• Trade ties with the United States remain a key risk that could limit further tightening.

ECB decision on the horizon

• The European Central Bank is set to announce its policy decision on Thursday, with markets expecting the deposit rate to stay at 2.50% after a 50‑bp increase earlier in the year.
• Persistent energy‑driven inflation has sparked debate about a possible December hike.
• Investors will watch the ECB’s assessment of inflation risks and growth outlook for clues on the future rate path.

What traders are watching next

• BoC Governor Tiff Macklem’s press conference for hints on further rate moves.
• ECB press release and accompanying statements for any shift in the inflation narrative.
• Key Canadian data on energy prices and consumer price inflation later this week.

Related news

• Fed holds rates steady, bitcoin barely moves as December hike looms
• Gold slips toward $4,000 as oil above $100 clouds Fed outlook
• Obr downgrades uk growth forecast for 2027 despite healey budget
• Bitcoin and gold hold near key levels ahead of Fed decision

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This article is compiled from international market news for information only. It is not investment advice.