Why the Euro’s Silent Surge Against the Pound and Canadian Dollar Could Change Your Investment Game Forever
Ever wonder why the Euro seems to be flexing its muscles against the Pound and the Canadian Dollar lately? It’s like watching a seasoned chess player calmly outmaneuvering opponents distracted by all sorts of political noise and economic jitters. TD Securities’ FX strategists are betting on the Euro’s resilience—with the UK’s post-election chaos casting a shadow over the Pound, and a hopeful baseline oil price around $90 giving the Euro an edge over the Canadian Dollar. Plus, with the European Central Bank eyeing at least one rate hike in 2026 while the Bank of Canada takes a breather, there’s a subtle power shift unfolding beneath the surface. So, is the Euro gearing up for a breakout rally, or does it face a few more hurdles on this road? Let’s dive in and unpack what this could mean for savvy investors like us. LEARN MORE
TD Securities’ FX strategists see the Euro (EUR) relatively strong on crosses, particularly versus the Pound (GBP) and Canadian Dollar (CAD). They argue United Kingdom (UK) political noise after recent elections could weigh on GBP, while central bank divergence and a baseline of Oil near $90 support EUR over CAD. They expect at least one European Central Bank (ECB) hike in 2026, with the Bank of Canada (BoC) likely on hold this year.
Euro favoured on key crosses
“The EUR is seen as relatively strong against GBP and CAD amid varied central bank policies and political factors.”
“Short of that, EUR looks more favorable on the crosses vs the GBP where local political noise after recent elections could start to weigh on the pound.”
“From the lens of relative central bank divergence, we see scope for EUR to fare better than CAD if geopolitics remains in stalemate.”
“We expect at least one hike by the ECB in 2026 whereas we expect the BoC to remain on hold for the remainder of the year under our baseline scenario of oil prices settling in closer to 90$/ barrel.”
“EUR has a higher bar to cross to keep rallying from current levels especially as it has been relatively resilient despite the oil import reliance.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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