Euro Strengthens Against CAD on Positive Investor Confidence and Tightening Expectations

The Euro (EUR) has maintained its strength against the Canadian Dollar (CAD), trading around 1.6080 during European hours on Monday. The EUR/CAD cross remains stronger for the second consecutive day, following the release of Eurozone Sentix Investor Confidence data and Germany's Industrial Production figures.

According to the data, Eurozone's Sentix Investor Confidence rose significantly to 5.1 in September from 0.9 in August. This marked a turning point after five months of negative sentiment. However, Germany's Industrial Production fell 1.1% month-over-month in July, missing market expectations of a 0.3% gain.

Despite the weaker-than-expected economic output in Germany, the Euro received support from expectations of monetary tightening by the European Central Bank (ECB). Andrew Kenningham, chief Europe economist at Capital Economics, noted that the ECB Governing Council looks certain to lift its deposit rate from 2.25% to 2.50%.

However, higher crude oil prices due to geopolitical tensions between the US and Iran may limit further gains for the EUR/CAD cross. Energy prices surged after a recent escalation in tensions, with Brent crude oil rising by +7.80% last week to $96.28/bbl.