Euro remains under pressure against Canadian Dollar even with oil prices lower

Expectations that the ECB will keep interest rates unchanged on Thursday, with potential increases postponed until December, weigh on the Euro.
The Euro’s downside risks have been contained by Moody’s decision to retain France’s Aa3 credit rating.
Diplomatic discussions in the Middle East are pushing crude oil prices lower, continuing to provide a cushion for EUR/CAD.

At around 1.5650 in Tuesday’s European session, EUR/CAD is heading lower for a sixth consecutive day. The decline comes as the Euro (EUR) remains under pressure ahead of this week’s European Central Bank (ECB) policy announcement.

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

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

Support for sentiment towards the single currency came last week when Moody’s Ratings reaffirmed France’s Aa3 credit rating. The rating was maintained despite a sustained increase in national debt and political fragmentation that has hindered attempts to curb borrowing. By easing concerns that France’s fiscal difficulties could prompt a wider repricing of Eurozone assets, the decision helped restrain downward pressure on the Euro.

Euro area PMIs ease while continuing to point to solid Q4 growth

Despite some cooling, Euro area survey readings remain consistent with reasonably firm economic activity, 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,”.

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

Euro Weakens Most Against New Zealand Dollar Today

Today’s percentage movements in the Euro (EUR) against the major currencies listed are set out below. The Euro recorded its weakest performance against the New Zealand Dollar.

	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%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Choosing the Euro on the left and following its row across to the US Dollar, for instance, gives the percentage change for EUR (base)/USD (quote) in the corresponding cell.