EUR/CAD Hits 7-Year High Near 1.6050 Amid Euro Strength and Falling Oil Prices

EUR/CAD Hits 7-Year High Near 1.6050 Amid Euro Strength and Oil Weakness

EUR/CAD continues to climb on Thursday, reaching 1.6052, a level not seen since March 2018, as the Euro receives support from dovish European Central Bank (ECB) commentary and a surge in risk appetite. Meanwhile, the Canadian Dollar (CAD) weakens significantly due to collapsing crude oil prices, widening the gap in this currency pair.

CAD Falters as Oil Prices Plunge

The Canadian Dollar, often sensitive to commodity prices, remains under heavy pressure after WTI crude fell by over 12.5% this week. With oil being Canada’s main export, the steep decline drags down CAD sentiment across the board.

ECB Officials Signal Rate Cut Flexibility

ECB policymaker Francois Villeroy de Galhau stated that the central bank could cut interest rates further despite market volatility caused by oil. He noted that inflation expectations remain contained, providing room for policy easing.

Additionally, ECB Chief Economist Philip Lane echoed the sentiment, saying policy must consider not only the base case but also risks to inflation and activity, reinforcing expectations for continued dovishness from the ECB.

Technical Outlook: Can EUR/CAD Break 1.6100?

If upward momentum persists, EUR/CAD could aim for the 1.6100 resistance level in the short term. However, stabilization in crude oil prices or hawkish surprises from the ECB could trigger a pullback.

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