EUR/CAD hovers above 1-month low, BoC ahead

The EUR/CAD currency pair hovered above a fresh 1-month low of 1.5852 on Tuesday, as market players realized the trade deal between the US and the EU was an unbalanced one, favoring the United States and offering little to improve the Euro Area’s economic outlook.

Meanwhile, investors braced for the outcome of the Bank of Canada’s policy meeting.

The US and the EU reached a framework trade agreement over the weekend, which resulted in a 15% import tariff on the majority of EU goods.

France labelled the framework trade agreement as a “dark day” for Europe. And, Germany’s Chancellor Friedrich Merz warned the German economy would face “significant” damage because of the tariffs.

On the monetary policy front, the Bank of Canada is expected to keep its benchmark interest rate intact at 2.75% at its July 30th policy meeting.

June’s decision has been the second hold after 225 basis points of rate cuts in seven consecutive meetings.

The EUR/CAD currency pair was last down 0.19% on the day to trade at 1.5883.