EUR/CAD is trading firmer near 1.6370 in early European hours on Friday, supported by falling crude oil prices and weaker Canadian economic data. The Canadian Dollar (CAD) remains under pressure while investors await remarks from European Central Bank (ECB) President Christine Lagarde later in the day.
Oil weakness drags on CAD
Crude oil prices have slipped to their lowest levels in nearly four months as concerns over oversupply intensify ahead of this weekend’s OPEC+ meeting. The decline in Canada’s top export has weighed heavily on the CAD, with analysts noting market anxiety about OPEC’s production outlook.
Canadian data reinforces downside pressure
Adding to the bearish tone, Canada’s S&P Global Manufacturing PMI fell to 47.7 in September from 48.3 in August, marking the eighth consecutive month of contraction. The weak print has fueled speculation that the Bank of Canada (BoC) could lean toward another rate cut if economic conditions fail to improve.
Euro steady on cautious ECB remarks
On the euro side, ECB officials have signaled a steady policy stance. President Christine Lagarde said there are no significant threats to the euro-area inflation outlook, though vigilance remains necessary. Separately, ECB Governing Council member Martins Kazaks suggested interest rates could stay at current levels unless the economy faces fresh shocks. Markets now assign only a 10% probability of further easing this year, with limited chances of cuts before mid-2026.
While the cautious ECB tone has lent some stability to the euro, any dovish surprises in Lagarde’s comments later today could limit EUR/CAD’s upside.
