EUR/CAD supported above 1.56 with German fiscal package, Canada CPI eyed

The EUR/CAD currency pair remained supported above the 1.56 mark on Monday ahead of Germany’s impending vote on a proposed fiscal spending package and Canada’s CPI inflation report.

The Euro has recently drawn support from a consensus between key political figures in Germany regarding substantial increases in state borrowing. Incoming German Chancellor Friedrich Merz has forged a debt deal with the Greens political party that will result in a substantial increase in defense spending.

Merz has actively pursued the enactment of a EUR 500 billion financial package, intended for vital infrastructure development and substantial revisions to existing borrowing regulations. These revisions are designed to stimulate economic expansion and significantly bolster military spending in Germany, a key economy within the EU bloc.

Germany’s parliament is expected to vote on the debt bill on Tuesday.

Meanwhile, market players will also be looking into Canadian CPI inflation data for February due out tomorrow.

The median CPI inflation probably remained stable at 2.7% in February, according to market consensus.

The trimmed-mean core inflation rate, the Bank of Canada’s preferred measure of underlying inflation, probably rose to 2.8% in February from 2.7% in January.

The EUR/CAD currency pair was last up 0.12% on the day to trade at 1.5646. Last week, the minor Forex pair went up as high as 1.5856, or its highest level since July 31st 2020.