EUR/CAD steadies ahead of BoC, ECB rate decisions

The EUR/CAD currency pair traded with slight change on Wednesday amid caution ahead of the outcome of the Bank of Canada’s and the European Central Bank’s April policy meetings.

The European Central Bank is largely expected to leave the main refinancing operations rate unchanged at a 22-year high of 4.5% and the deposit facility rate – at an all-time high of 4%.

The ECB press conference will be closely watched for clues on the timing of the first rate cut.

ECB officials have agreed that it is premature to talk about interest rate cuts amid elevated underlying inflationary pressures.

The central bank has forecast headline inflation to average 2.3% this year, compared to 2.7% in the December projection, while the core inflation rate is forecast at 2.6%, compared to 2.7% in the prior projection.

Meanwhile, the Bank of Canada is also expected to leave its target for the overnight rate intact at 5% at its April meeting.

In March, the BoC said it would persist in its policy of quantitative tightening until it saw further and sustained easing in core inflation.

Currency Pair Performance

As of 9:49 GMT on Wednesday the EUR/CAD currency pair was inching up 0.03% to trade at 1.4737.

Yesterday the minor Forex pair went up as high as 1.4764. The latter has been the pair’s strongest level since March 20th (1.4765).