The EUR/CAD pair traded in proximity to a one-week high on Thursday, as focus sets on the outcome of the European Central Bank’s policy meeting later today.
The ECB is largely expected to maintain interest rates steady at multi-year highs, but still, market players will be watching closely ECB President Christine Lagarde’s press conference for any hints regarding the timing of possible interest rate cuts.
Markets are pricing about 130 basis points of ECB rate cuts in 2024, with the first such move in April or June.
Despite that the ECB ended its quick rate-hiking cycle in September, it has maintained a rather hawkish stance because of persistent underlying price pressures within the Euro Area.
Meanwhile, the Bank of Canada left the target for its overnight rate unchanged at 5% for the fourth consecutive policy meeting in January, in line with market expectations.
BoC policy makers said concerns remained about risks regarding the inflation outlook, after preferred core inflation gauges surprisingly rose in December. It suggested monetary policy might remain restrictive for the time being.
The BoC expects headline inflation will remain steady close to 3% during the first half of 2024, before decelerating to the 2% objective in 2025.
As of 8:07 GMT on Thursday EUR/CAD was inching up 0.05% to trade at 1.4720. Earlier in the session, the minor Forex pair went up as high as 1.4724. The latter has been the pair’s strongest level since January 16th (1.4726).
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