Euro Rises Against CAD as Rate Gap Widens

The Euro has continued its upward trend against the Canadian Dollar for the third consecutive day, reaching around 1.6110 during European hours on Monday.

This appreciation is largely due to expectations of a widening interest rate gap between Canada and other major economies, driven by the Bank of Canada's decision to hold its key policy rate steady at 2.25% in September.

In contrast, both the US Federal Reserve and the European Central Bank raised their respective benchmark rates by 25 basis points, bringing the Fed funds target range to 3.75%-4.00% and the ECB deposit rate to 2.50%

Financial markets are currently pricing in a 45% chance of another 25 bps rate hike by the ECB in October, with a subsequent increase fully priced in no earlier than December.