Euro Gains Against CAD as Markets Price in ECB Interest Rate Hike

The Euro has gained ground against the Canadian Dollar, trading around 1.6030 during European hours on Wednesday, as markets heavily price in an expected interest rate hike by the European Central Bank (ECB) this Thursday.

The ECB is widely anticipated to increase its Rate on Deposit Facility by 25 basis points to 2.5%, driven by surging energy prices due to the ongoing US-Iran conflict.

Inflation in the Eurozone rose above 3% in August, prompting traders to fully price in a 25-basis-point hike.

CARSTEN BRZESKI, global head of macro at ING, stated, 'We expect the ECB to hike rates by 25 basis points. Another insurance rate hike.' 'Or for those who don’t like this term: a dovish rate hike,' he added.