The CAD to EUR exchange rate has recently been characterized by uncertainty as mixed economic factors influence both currencies. The Canadian dollar (CAD) is experiencing downward pressure due to expectations of an interest rate cut by the Bank of Canada (BoC), which may be further exacerbated by ongoing bearish sentiment in the market. As of early September 2025, non-commercial net short positions on the CAD have surged, indicating heightened skepticism about its near-term strength.
Contrastingly, the euro (EUR) has gained momentum, buoyed by positive economic indicators, particularly in Germany, where an unexpected rise in the ZEW economic sentiment index has supported the common currency. Analysts have noted the euro's strengthening is also attributed to a weaker US dollar, with which it typically has an inverse correlation. Comments by European Central Bank officials suggest a stable monetary policy, which may enhance confidence in the euro going forward.
Currently, the CAD is trading at approximately 0.6131 against the euro, touching 90-day lows and remaining 1.6% below its three-month average. This recent trend highlights a broad range of 0.6131 to 0.6368, suggesting a period of relative stability. This comes amid fluctuating oil prices; as Canada is a major oil exporter, the CAD’s performance is intricately tied to crude prices. Oil traded at 68.47 USD recently, nearing its three-month average but within a volatile range of 65.50 to 78.85 USD, indicating that changes in oil markets could influence CAD movements.
Looking ahead, while a Reuters poll indicates a potential strengthening of the CAD in the longer term—projecting increases against the USD—it is essential to monitor the upcoming BoC policy meeting and any statements from ECB officials that could affect the euro. Given the economic data and sentiment trends, traders should prepare for continued volatility and consider these factors in planning international transactions involving CAD and EUR.
