EUR/CAD Holds Firm on Rising German Business Sentiment

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: October 26, 2026

Key Moments

EUR/CAD trades around 1.5710, holding earlier gains despite limited reaction to Germany’s IFO survey results.
Germany’s IFO Business Climate Index rises to 90.2 in October, while the IFO Current Assessment Index slips to 88.8.
Moody’s decision to maintain France’s Aa3 rating and weaker crude oil prices weigh on CAD and support the cross.

Euro-CAD Cross Steady After Bullish Gap

EUR/CAD remains in positive territory after starting the session with a bullish gap, later easing back but still trading higher near 1.5710 during European hours on Monday. Price action in the pair shows only a muted response following the latest German IFO business survey, with the cross broadly consolidating its earlier advance.

German IFO Data Sends Mixed Signals

The latest survey from the German IFO Institute shows an improvement in headline sentiment but softens in the current conditions component. The Business Climate Index climbs to 90.2 in October from 89.9 in September, exceeding market expectations of 89.8.

In contrast, the IFO Current Assessment Index declines to 88.8, down from 89.5 previously. The Expectations Index – which the Institute describes as an early gauge of current conditions and corporate expectations for the next six months – advances to 91.6 from 90.4 in the prior release.

IFO Indicator	October Reading	Previous	Consensus
Business Climate Index	90.2	89.9	89.8
Current Assessment Index	88.8	89.5	–
Expectations Index	91.6	90.4	–

Moody’s Decision Gives France Some Relief

Commentary from Deutsche Bank points to a supportive backdrop for French assets after Moody’s ratings action at the end of last week. Analysts there emphasize that France “got a boost on Friday night as Moody’s defied market expectations and maintained their Aa3 rating (negative outlook).” They indicate that this outcome provided some relief to markets after a period of volatility around French instruments, even if the retained negative outlook means that the possibility of future action remains in focus for investors.

Canadian Dollar Pressured as Oil Retreats

The Canadian Dollar underperforms as softer crude oil prices add pressure to the commodity-linked currency and help EUR/CAD sustain its gains. Oil prices fall after US President Donald Trump rules out an immediate military strike against Iran, saying, “there will not be a strike today,” according to Al Jazeera.

This follows earlier comments in which Trump indicated that Washington might have to “finish the job” or potentially come to an agreement with Tehran amid escalating threats from Iran and the Houthis toward American interests in the region. The shift in tone coincides with the move lower in crude, dampening support for CAD.

Rabobank Expects BoC to Stay on Hold

On the policy front, analysts at Rabobank outline their expectations for the upcoming Bank of Canada decision. Strategists at the firm write that they “expect the Bank of Canada to hold the overnight policy rate at 2.25% at the October 28 meeting,” highlighting their belief that the central bank will resist market calls for further tightening and instead leave the benchmark rate unchanged.

IFO Business Climate – Indicator Overview

The IFO – Business Climate Index, compiled and released by the CESifo Group, is regarded as an important early signal of business conditions and expectations in Germany. The survey covers more than 7,000 companies, asking them to evaluate their current business situation and their short-term plans.

According to the description provided, stronger readings are typically associated with positive economic momentum and are seen as supportive for the euro, while weaker outcomes are interpreted as negative for the currency.