Euro snaps three-day losing streak against Canadian Dollar, BoC policy eyed

The Euro recovers against the Canadian Dollar after a three-day losing streak.
The BoC is expected to leave interest rates unchanged at 2.25%.
Analysts at MUFG expect the ECB to deliver another interest rate hike this year.

Sagar Dua FXStreet

The Euro (EUR) bounces back against the Canadian Dollar (CAD) after a three-day losing streak, trading 0.13% higher to near 1.6078 during the European trading session on Wednesday. The EUR/CAD pair remained under pressure in the last three trading days, as oil prices surged due to renewed hostilities in the Middle East.

Canadian Dollar Price Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the weakest against the British Pound.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.11%	-0.13%	-0.05%	-0.01%	-0.15%	-0.04%	-0.01%
EUR	0.11%		-0.07%	0.06%	0.09%	-0.09%	0.00%	0.10%
GBP	0.13%	0.07%		0.13%	0.15%	-0.02%	0.08%	0.16%
JPY	0.05%	-0.06%	-0.13%		0.02%	-0.12%	-0.02%	0.02%
CAD	0.01%	-0.09%	-0.15%	-0.02%		-0.14%	-0.09%	0.00%
AUD	0.15%	0.09%	0.02%	0.12%	0.14%		0.07%	0.13%
NZD	0.04%	-0.01%	-0.08%	0.02%	0.09%	-0.07%		0.08%
CHF	0.00%	-0.10%	-0.16%	-0.02%	-0.01%	-0.13%	-0.08%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

The WTI Oil price is up over 17.5% in the last two weeks to near $79.00. Currencies from economies, such as Canada, which are net energy exporters, tend to outperform in a high-oil-price environment.

Later in the day, investors will pay close attention to the Bank of Canada’s (BoC) monetary policy announcement at 13:45 GMT. The BoC is expected to leave interest rates unchanged at 2.25%, as signs of an easing of underlying price pressures give policymakers little reason to raise borrowing costs while a rebound in economic growth after a technical recession reduces the need for any stimulus, Reuters report.

In the Eurozone, the resurgence in energy prices due to renewed war between the United States (US) and Iran has increased fears of more interest rate hikes by the European Central Bank (ECB) this year. Analysts at MUFG expect the ECB to deliver another 25 basis points (bps) rate hike in the September meeting.

Lately, a few ECB officials have also warned that inflationary pressures could remain higher due to Middle East conflicts. ECB Governing Council Member and President of the Deutsche Bundesbank, Joachim Nagel, said earlier this month, “I will keep options open for July and September decisions,” citing, “Inflation will stay at a high level this year.”

Economic Indicator

BoC Interest Rate Decision

The Bank of Canada (BoC) announces its interest rate decision at the end of its eight scheduled meetings per year. If the BoC believes inflation will be above target (hawkish), it will raise interest rates in order to bring it down. This is bullish for the CAD since higher interest rates attract greater inflows of foreign capital. Likewise, if the BoC sees inflation falling below target (dovish) it will lower interest rates in order to give the Canadian economy a boost in the hope inflation will rise back up. This is bearish for CAD since it detracts from foreign capital flowing into the country.

GBP/USD clings to moderate gains near 1.3400

GBP/USD enters a consolidation phase near 1.3400 after closing in positive territory on Tuesday. Weaker-than-expected June CPI readings from the US make it difficult for the US Dollar to gather strength and allow the pair to stay afloat. Fed Chair Warsh's second day of congressional testminoy and US producer inflation data could ramp up the market volatility in the American session.

EUR/USD holds steady above 1.1400 ahead of US data

EUR/USD stabilizes following Tuesday's rebound and trades in a narrow channel above 1.1400. The US Dollar (USD) struggles to stay resilient against its rivals following the soft inflation data but escalating tensions in the Middle East limit the pair's upside for now. Later in the day, June producer inflation data from the US will be watched closely by market participants.

Gold struggles to build on Tuesday's gains, retreats toward $4,000

After rising more than 1% on Tuesday, Gold loses its traction midweek and declines toward $4,000. While the USD stays on the back foot following the soft June inflation data, escalating tensions in the Middle East causes XAU/USD to stretch lower. Markets await PPI data from the US, while keeping a close eye on headlines surrounding the US-Iran conflict.

Bitcoin, Ethereum, and Ripple show tentative recovery as key technical levels hold

Bitcoin, Ethereum and Ripple trade with a mild positive bias on Wednesday as sentiment improves across the cryptocurrency market. BTC is testing its 50-day Exponential Moving Average, ETH has broken above a key resistance level at $1,800, while XRP has found support around a key level.

2% and nothing else: Why Warsh gave Congress three hours of Greenspan

The Federal Reserve Chair who wants the institution to say less spent Tuesday legally required to say more, on the one morning the data handed him something pleasant to say. June's Consumer Price Index fell 0.4% on the month, the steepest single-month decline since April 2020.

-0.4%: Why the biggest CPI drop since 2020 couldn't buy back a single cut

The June CPI fell 0.4% on the month, the largest one-month decline since April 2020, dragging the annual rate to 3.5% from May's 4.2% and snapping a three-month acceleration streak. Core prices went nowhere, flat on the month and down to 2.6% YoY, both under consensus.