Euro Gains Against Canadian Dollar Amid Strong Investor Sentiment and Expected Rate Hike

The EUR/CAD currency cross remained strong for the second consecutive day, trading at around 1.6080 during European hours on Monday.

This was due in part to the Eurozone Sentix Investor Confidence data, which came in significantly higher at 5.1 in September from 0.9 in August, and turned positive after five months of negative sentiment.

Despite Germany's Industrial Production falling 1.1% month-over-month in July, missing market expectations of a 0.3% gain, the Euro found support from expectations of monetary tightening by the European Central Bank (ECB), with a widely anticipated interest rate hike of 25 basis points at its upcoming policy meeting on Thursday.

However, higher crude oil prices are lending support to the Canadian Dollar, which could constrain further gains for the EUR/CAD cross. Brent crude oil prices surged by +7.80% last week, and analysts at Deutsche Bank note that risk markets have lost momentum due to fresh concerns about inflation pressures.