Euro Soars to The Highest Level since Early-June Vs Loonie due to Policy Divergence
The euro stretched its gain versus the Canadian dollar on Thursday, extending its rally to a sixth consecutive trading session as the European Central Bank is widely expected to scale back its bond-buying program while the Bank of Canada sounded dovish in its latest policy statement.
The euro added 0.1 percent against the Loonie in Asian trading session on Thursday, sending the pair EURCAD to as high as 1.51300 – the strongest level since June 09th. The single currency strengthened ahead of an ECB meeting where the central bank is anticipated to cut back its bond-buying stimulus. The ECB is seen likely to announce a plan to start trimming its asset purchases from 60 billion euros to 40 billion euros per month starting from January.
Meanwhile, the BOC kept interest rates unchanged at 1 percent as expected on Wednesday following two straight hikes in July and September. The central bank claimed that although less stimulus will be required over time in response to the economy’s impressive run over the last four quarters, the bank will be cautious given “substantial uncertainty” about the renegotiation of NAFTA as well as the Canadian dollar’s recent appreciation which might cause inflation to reach the 2-percent target a little bit later in 2018 than previously expected.
Buy Stop at 1.51300, Take profit at 1.52000, Stop loss at 1.51000