Euro Edges Higher vs Canadian Dollar Ahead of BoC Decision

Written by Sandra Leggero

Sandra Leggero has a background in financial markets, having spent more than 9 years in commodities trading for several European and Asian companies. She holds a degree in Economics from the University of Pavia and specializes in emerging markets.

, | Updated: July 15, 2026

Key Moments

EUR/CAD rose 0.13% to around 1.6078 after three daily losses. The rebound came during Wednesday’s European session.
The Bank of Canada is expected to leave its policy rate unchanged at 2.25% at the 13:45 GMT announcement.
Meanwhile, MUFG analysts expect another 25 bps European Central Bank rate hike this year as energy prices rise again.

Euro Rebounds After Three-Day Slide

The Euro (EUR) recovered slightly against the Canadian Dollar (CAD) after three straight sessions of losses. EUR/CAD gained 0.13% and traded near 1.6078 during Wednesday’s European session. However, the pair remains pressured by recent oil gains linked to renewed Middle East tensions. As a result, the Canadian Dollar has received support from stronger energy prices.

Canadian Dollar Performance vs Major Currencies

The Canadian Dollar showed mixed performance against major currencies. Notably, CAD weakened most against the British Pound, making GBP its strongest counterpart on the day. In addition, the Canadian Dollar also declined against the Euro. A currency heat map showed percentage changes across major pairs, including USD, EUR, GBP, JPY, CAD, AUD, NZD, and CHF.

Base currency	Key observation
CAD vs GBP	CAD showed its weakest performance against the British Pound
CAD vs EUR	CAD also weakened against the Euro
All majors	Heat map displayed percentage moves across USD, EUR, GBP, JPY, CAD, AUD, NZD, and CHF

In the heat map, the base currency appears in the left column, while the quote currency is shown across the top row. For example, selecting CAD as the base currency and USD as the quote currency shows the percentage move in CAD/USD.

Oil Price Rally and Implications for CAD

West Texas Intermediate (WTI) crude has climbed more than 17.5% over the past two weeks. The benchmark trades near $79.00. Therefore, currencies linked to energy-exporting economies, such as Canada, often benefit from higher oil prices. Stronger energy revenues can improve trade conditions and support economic growth.

BoC Policy Announcement in Focus

Markets are now focused on the Bank of Canada’s monetary policy decision at 13:45 GMT. The central bank is widely expected to keep its benchmark rate unchanged at 2.25%. According to Reuters, softer inflation pressures have reduced the need for further tightening. At the same time, improving economic activity after a technical recession may limit calls for additional support.

Eurozone Outlook and ECB Policy Expectations

In the Eurozone, rising energy prices have increased concerns about future inflation. The latest move comes as geopolitical tensions between the United States and Iran continue to affect markets. Consequently, the European Central Bank may keep rates higher for longer. MUFG analysts expect the ECB to deliver another 25 basis points (bps) rate hike at its September meeting.

Furthermore, several ECB officials have warned that inflation risks remain elevated due to ongoing Middle East conflicts. ECB Governing Council Member and Deutsche Bundesbank President Joachim Nagel said he would keep options open for upcoming policy decisions. He also noted that inflation could remain high this year.

BoC Interest Rate Decision – Indicator Details

The Bank of Canada announces its policy rate after each of its eight scheduled meetings every year. When inflation remains above target, the BoC may adopt a hawkish approach and raise rates. Higher rates usually support the Canadian Dollar by attracting foreign investment.

Conversely, a dovish policy stance can lead to rate cuts when inflation falls below target. Lower rates may reduce demand for Canadian assets and place pressure on CAD. Therefore, traders closely watch BoC decisions for signals about future currency direction.