EUR/CAD stays above 1.6250 due to cautious ECB outlook

EUR/CAD moves little after registering modest gains in the previous session, trading around 1.6260 during the Asian hours on Tuesday. The currency cross may regain its ground as the Euro (EUR) gains support on expectations that the European Central Bank (ECB) has finished cutting interest rates. Markets expect that the ECB will hold its deposit rate this year and see no change by the end of next year. Traders now look forward to the release of the final German Q3 GDP for some impetus.

ECB Governor and Deutsche Bundesbank President Joachim Nagel spoke at the Frankfurter Impulse event in Frankfurt on Monday, claiming that although food inflation remains stubborn, the current level of the Euro at $1.16 is not a cause for concern. He noted that the central bank is also monitoring the strong rise in service prices, noting that December projections will offer clearer insight into whether the current monetary policy stance remains appropriate.

Additionally, the EUR/CAD cross may also gain ground as the commodity-linked Canadian Dollar (CAD) receives downward pressure from the lower Oil prices. West Texas Intermediate (WTI) Oil price trades around $58.70 at the time of writing. Crude Oil prices lose ground as the United States (US) pushes for a peace plan between Ukraine and Russia to end the three-year war. The American Petroleum Institute (API) weekly crude Oil stock report will be eyed later on Tuesday.

Statistics Canada reported Friday that Retail Sales fell 0.7% in September, in line with market expectations and reversing August’s 1% increase. Traders await Canadian Gross Domestic Product (GDP) growth figures due this week.