EURCAD is bearish ahead of economic data from the Eurozone and Canada.
EURCAD – Daily Chart
EURCAD dropped from the 1.5100 resistance area, and a close here could see further lows into the weekend.
The European Central Bank followed the Federal Reserve’s footsteps with a 25-basis point rate hike and said inflation has been “too high for too long”. Although the ECB said it was “not Fed-dependent,” the central bank has moved again to cool inflation.
“There was a variety of views. Some governors suggested maybe 50 was appropriate, others also believed 25. I didn’t hear anybody suggest that zero was appropriate,” ECB President Christine Lagarde said.
“This is a hiking journey that we are on. And it will continue to be so”.
“We are not pausing. That’s very clear… We know we have more ground to cover,” Lagarde added.
“It doesn’t matter how close to the end of this rate hike cycle we might be, the reality of now is something investors can’t ignore. Hot on the heels of the Fed the ECB has followed the same script and upped rates by a quarter of a percentage point,” said Danni Hewson at AJ Bell.
“Inflation is still proving unpredictable and intractable and with central bankers all chasing after that 2% target even that most anticipated pause can’t be fully priced in until the mood music really does change key.”
A better-than-expected trade balance boosted the Canadian dollar. The Canadian economy saw its trade balance rise to C$0.97 billion after a loss of C$-0.49 billion last month.
Tomorrow will bring Canadian employment, with markets expecting a 20k increase in jobs, compared to 34.7k in the previous month. That is expected to show a rise in unemployment in the country to 5.1% from 5%. A better-than-expected number could add to the recent gains in the Canadian dollar.
