Lower oil prices offer Euro little support against Canadian Dollar

With the ECB expected to keep interest rates unchanged on Thursday and potential increases deferred until December, the Euro retreats.
Aa3 remains France's credit rating following Moody’s review, helping to contain downside risks for the Euro.
Middle East diplomatic negotiations are pushing crude oil prices lower, providing continued support for the EUR/CAD cross.

EUR/CAD trades near 1.5650 in Tuesday's European session. The cross is down for a sixth consecutive day as the Euro (EUR) comes under pressure ahead of this week's European Central Bank (ECB) policy decision.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Against a backdrop of slowing economic momentum, the ECB is expected to hold its key interest rate steady on Thursday. A Reuters survey of economists points instead to a 25 basis point increase at the December meeting. For indications of the policy path ahead, traders will scrutinise forthcoming remarks from ECB President Christine Lagarde.

Support for sentiment towards the single currency came last week when Moody’s Ratings retained France’s Aa3 credit rating. The decision came despite steadily increasing national debt and political fragmentation that has hampered efforts to curb borrowing. By easing concerns that France's fiscal difficulties could prompt a wider repricing of Eurozone assets, the rating decision helped contain downward pressure on the Euro.

Q4 Growth Still Solid as Euro Area PMIs Ease

Despite cooling survey readings, the Euro area's activity backdrop remains reasonably firm, according to analysts at Danske Bank. They note that “the flash PMIs fell slightly more than expected in October but continue to point to decent growth at the start of Q4 despite somewhat softer momentum,” indicating that the data still suggest resilient activity.

Lower crude oil prices could also restrict further EUR/CAD losses by weighing on the commodity-linked Canadian Dollar. Renewed Middle East diplomacy lifted hopes of averting a broader escalation of the US-Iran conflict, sending oil prices lower. After high-level discussions in Tehran, officials from Iran, Saudi Arabia, Pakistan, and Turkey agreed on Monday to strengthen regional cooperation. They also agreed to continue security talks aimed at safeguarding regional peace and stability.

Today's Euro Performance

Against the major currencies listed below, the Euro (EUR) recorded its weakest performance versus the New Zealand Dollar today. The table sets out its percentage changes against each currency.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.16%	0.16%	0.17%	0.05%	-0.06%	-0.13%	0.08%
EUR	-0.16%		-0.00%	0.04%	-0.11%	-0.21%	-0.31%	-0.07%
GBP	-0.16%	0.00%		0.04%	-0.09%	-0.21%	-0.28%	-0.07%
JPY	-0.17%	-0.04%	-0.04%		-0.13%	-0.25%	-0.32%	-0.11%
CAD	-0.05%	0.11%	0.09%	0.13%		-0.11%	-0.19%	0.03%
AUD	0.06%	0.21%	0.21%	0.25%	0.11%		-0.08%	0.14%
NZD	0.13%	0.31%	0.28%	0.32%	0.19%	0.08%		0.23%
CHF	-0.08%	0.07%	0.07%	0.11%	-0.03%	-0.14%	-0.23%

To read the heat map of percentage changes between major currencies, select the base currency in the left-hand column and the quote currency in the top row. Selecting the Euro on the left and following that row across to the US Dollar, for instance, gives the percentage change for EUR (base)/USD (quote) in the intersecting cell.