EURCAD December 2025 fundamental analysisThe fundamental outlook for EUR/CAD in December 2025 suggests a moderately bullish environment with the EUR expected to benefit from relatively steady economic growth in the Eurozone and cautious monetary policy from the European Central Bank (ECB). Meanwhile, the Canadian dollar (CAD) may face downward pressure from lower oil prices and a more restrained economic growth forecast in Canada. Overall, the pair appears positioned for moderate upside in December 2025, favoring a buy stance.
Eurozone Economic and Monetary Outlook
Economic growth in the Eurozone is projected to be modest but positive, with GDP growth around 1% for 2025 and expected headline inflation remaining close to the ECB's 2% target. The ECB is expected to keep interest rates steady in December 2025 after several rate cuts since mid-2024, maintaining a supportive but cautious stance on monetary policy to sustain economic resilience despite global uncertainties. This stable policy environment is supportive of the euro.
Canadian Economic and Monetary Outlook
Canada’s economy is expected to grow around 1.2% in 2025, with the Bank of Canada recently cutting its policy rate to 2.25% and signaling a "higher bar" for any further cuts. Inflation is cooling, but rate cuts so far have dampened the CAD. Additionally, Canadian growth is relatively subdued due to structural adjustments and external uncertainties. Key economic indicators point to a cautious outlook with limited immediate rate changes expected in December.
Commodity and External Factors Impacting the Pair
The Canadian dollar is significantly influenced by commodity prices, especially oil. With recent declines in oil prices driven by geopolitical developments (such as US pushes for peace plans affecting supply expectations), CAD faces downward pressure. This dynamic tends to weaken CAD relative to EUR in the near term. These commodity pressures add to the moderate EUR strength.
Technical and Market Sentiment
Forecasts indicate the EUR/CAD pair trading within an ascending channel with bullish momentum expected to continue unless disrupted. Monthly price targets range around 1.62 to 1.65. Expected volatility is moderate but the trend favors upward movement, supported by stable eurozone fundamentals and cautious Canadian economic conditions.
Trading verdict for December 2025
For December 2025, EUR/CAD is a buy. The euro's relative strength supported by stable ECB policy and Eurozone growth combined with Canadian economic caution and declining oil prices favor an appreciating EUR against CAD in December 2025.
