The EUR/CAD currency pair settled above Friday’s low of 1.5572, its weakest level since May 29th, in the wake of the European Central Bank’s and the Bank of Canada’s policy decisions.

The Bank of Canada kept its benchmark interest rate intact at 2.75% at its June 4th policy meeting, in line with market consensus.

This has been the second hold after 225 basis points of rate cuts in seven consecutive meetings.

In regard to the future policy interest rate path, Governor Tiff Macklem noted that “there was more diversity of views.”

“On balance, members thought there could be a need for a reduction in the policy rate if the economy weakens in the face of continued U.S. tariffs and uncertainty, and cost pressures on inflation are contained,” Macklem added.

Meanwhile, the ECB lowered all three of its benchmark interest rates by 25 basis points:

– the main refinancing operations rate to 2.15%;
– the deposit facility rate to 2.00%;
– the marginal lending rate to 2.40%.

The policy decision reflected updated inflation and GDP forecasts.

Euro Area’s headline inflation is forecast at 2.0% in 2025 (compared to 2.3% in the prior projection), at 1.6% in 2026 (compared to 1.9% in the prior projection) and at 2.0% in 2027.

Core inflation is projected at 2.4% in 2025 before easing to 1.9% in 2026.

And, GDP growth is projected at 0.9% in 2025, at 1.1% in 2026 (compared to 1.2% in the prior forecast) and at 1.3% in 2027, driven by higher real incomes, strong labor markets and rising government investment.

During the post-meeting press conference, ECB President Christine Lagarde said that the central bank was moving closer to the end of its easing cycle, indicating a potential pause after this week’s cut.

The EUR/CAD currency pair settled 0.29% lower at 1.5598 on Friday.

The minor Forex pair gained 0.11% for the week.