The EUR/CAD currency pair hovered just above a fresh three-week low of 1.5342 on Wednesday, as market players awaited the release of the minutes of the Bank of Canada’s March policy meeting for more insight into the central bank’s thinking.

The Canadian Dollar drew support from rising government bond yields and a surge in crude oil prices.

The yield on Canadian 10-year government bonds rose to 3.106%. Crude Oil Futures for May delivery were up 1.33% to $69.92 per barrel.

The Bank of Canada lowered its key interest rate by 25 basis points to 2.75% this month. This way, the BoC has now delivered 225 bps of rate cuts since the beginning of its monetary easing cycle in June 2024.

BoC Governor Macklem indicated that the current policy rate was at a neutral level, neither restrictive nor stimulative, centered around 2.75%.

The central bank also cautioned that “monetary policy cannot offset the impacts of a trade war.” According to the BoC, heightened trade tensions could disrupt job market recovery, increase inflationary pressures and curb growth. The BoC projects moderate growth in the first quarter of the year due to the trade conflict’s impact on “sentiment and activity.”

At the same time, the Euro’s outlook remains clouded by expectations of further interest rate cuts by the ECB and the potential for retaliatory tariffs from the US. In case such tariffs materialize, the Euro Area economy could face significant headwinds.

Still, ECB President Christine Lagarde suggested last week that the impact of US trade policies on inflation would be temporary.

The EUR/CAD currency pair was last down 0.21% on the day to trade at 1.5364.