As the Canadian dollar struggles as a result of declining oil prices, EUR/CAD remains high.
Crude drops in response to expectations of Middle East peace and impending high-level UN diplomatic gatherings.
Rate decisions would be made meeting by meeting, according to ECB President Christine Lagarde, who ruled out rate decreases anytime soon.
EUR/CAD continues to rise for the third day in a row, trading at 1.6090 on Monday during European time. As the commodity-linked Canadian Dollar (CAD) falters in the face of declining oil prices, the currency cross continues to be stronger.
Growing optimism that more diplomatic efforts could help put an end to the Middle East crisis and restore steady energy flows from the region is driving down the price of crude oil. US President Donald Trump added to this diplomatic momentum when he said he would "probably" be amenable to meeting Iranian President Masoud Pezeshkian this week on the fringes of the UN General Assembly in New York. In addition to this possible meeting, Trump is slated to meet with Chinese President Xi Jinping and may perhaps meet with other Persian Gulf leaders.
Christine Lagarde, the president of the European Central Bank (ECB), stated that any additional rate increases by the ECB "will rely on the future." The central bank would decide "meeting by meeting" whether to hold, raise, or lower interest rates, she continued, albeit lowering rates "seems highly improbable at the moment."
Despite the statement that growth is "a bit more promising than we imagined," the FXS Speechtracker score of 4.4/10, which is lower than Lagarde's historic 5.7/10 average, indicates a slightly more dovish tone. While the statement that second-round impacts are not yet apparent lessens the urgency of impending tightening and tempers Euro upside, the promise to decide on rates meeting by meeting highlights data reliance.
Overall, compared to Lagarde's typical position, the speech leans slightly dovish because there is less incentive to hike aggressively given the lack of obvious second-round consequences. With traders waiting for more solid data on inflation dynamics before repricing the ECB path, this combination of cautious optimism on growth and a patient policy posture is likely to keep the Euro range-bound for FX markets.
In an ECB study, predictions for euro inflation are slightly higher.
In the Euro area, "inflation expectations in the ECB's consumer survey were marginally higher in August," according to Deutsche Bank economists, highlighting a little firming of household pricing expectations following previous reductions.
Crude drops in response to expectations of Middle East peace and impending high-level UN diplomatic gatherings.
Rate decisions would be made meeting by meeting, according to ECB President Christine Lagarde, who ruled out rate decreases anytime soon.
EUR/CAD continues to rise for the third day in a row, trading at 1.6090 on Monday during European time. As the commodity-linked Canadian Dollar (CAD) falters in the face of declining oil prices, the currency cross continues to be stronger.
Growing optimism that more diplomatic efforts could help put an end to the Middle East crisis and restore steady energy flows from the region is driving down the price of crude oil. US President Donald Trump added to this diplomatic momentum when he said he would "probably" be amenable to meeting Iranian President Masoud Pezeshkian this week on the fringes of the UN General Assembly in New York. In addition to this possible meeting, Trump is slated to meet with Chinese President Xi Jinping and may perhaps meet with other Persian Gulf leaders.
Christine Lagarde, the president of the European Central Bank (ECB), stated that any additional rate increases by the ECB "will rely on the future." The central bank would decide "meeting by meeting" whether to hold, raise, or lower interest rates, she continued, albeit lowering rates "seems highly improbable at the moment."
Despite the statement that growth is "a bit more promising than we imagined," the FXS Speechtracker score of 4.4/10, which is lower than Lagarde's historic 5.7/10 average, indicates a slightly more dovish tone. While the statement that second-round impacts are not yet apparent lessens the urgency of impending tightening and tempers Euro upside, the promise to decide on rates meeting by meeting highlights data reliance.
Overall, compared to Lagarde's typical position, the speech leans slightly dovish because there is less incentive to hike aggressively given the lack of obvious second-round consequences. With traders waiting for more solid data on inflation dynamics before repricing the ECB path, this combination of cautious optimism on growth and a patient policy posture is likely to keep the Euro range-bound for FX markets.
In an ECB study, predictions for euro inflation are slightly higher.
In the Euro area, "inflation expectations in the ECB's consumer survey were marginally higher in August," according to Deutsche Bank economists, highlighting a little firming of household pricing expectations following previous reductions.
