EUR/CAD gathers strength above 1.6300 ahead of BoC rate decision

• EUR/CAD strengthens to near 1.6305 in Wednesday's early European session.
• The BoC is widely expected to deliver a 25 bps rate cut on Wednesday. 
• ECB policymakers see no reason to cut rates for now. 

The EUR/CAD cross gathers strength to around 1.6305 during the early European session on Wednesday. The Canadian Dollar (CAD) edges higher against the Euro (EUR) as the Bank of Canada (BoC) is expected to resume interest-rate cuts later on Wednesday. On the Euro front, the European Central Bank (ECB) President Christine Lagarde is scheduled to speak. 

The BoC has held its key rate at 2.75% steady for three consecutive meetings, despite trade tensions with the US and ongoing inflation concerns. The Canadian central bank is anticipated to lower its policy rate to 2.5% from 2.75% at the September meeting. 

According to a Reuters poll last week, over 80% of economists expect the BoC to reduce interest rates by 25 basis points (bps), with many expecting at least one more cut before the end of the year. Traders will closely monitor the BoC Press Conference about how far the easing cycle will eventually extend. The dovish tone of the Canadian central bank could exert some selling pressure on the CAD and create a tailwind for the cross. 

The ECB left interest rates unchanged at its September policy meeting last week. The central bank last cut rates in June, bringing rates further down from last year's record high of 4.0%. Traders raise bets that the ECB is done cutting rates, which could underpin the shared currency in the near term.  

ECB Governing Council members Martins Kazaks and Gediminas Simkus said on Tuesday that interest rates don't need to be cut further right now, though neither of them ruled out an eventual move.