I’ve been observing for some time how the EUR/CAD behaves, and honestly, the FX market between Europe and Canada has a pretty interesting pattern. After that chaotic 2022 when the Canadian dollar surged to 0.77 euros (something that hadn’t happened since 2012), things normalized considerably.

The context was brutal: post-pandemic inflation hit Europe hard, the invasion of Ukraine made everything more complicated, and the euro collapsed. But once the Eurozone began to recover gradually, we saw those extreme values naturally correct themselves. Now, looking back from 2026, the forecast for the Canadian dollar in 2024 that was made back then turned out to be quite accurate: the pair stayed stable, trading in a range of 0.66 to 0.70 euros.

What’s interesting is that historically, since the euro has existed, the CAD has fluctuated between 0.56 and 0.82 centimes. Those peaks in 2022 were truly exceptional. The market has a very strong tendency toward mean reversion, and that’s what we saw happen: after the turbulence, the pair returned to around 0.68 euros, which is practically its average value.

If we look at the chart from the last five years, the story is clear: between 2020 and the end of 2022, the euro depreciated significantly versus the Canadian dollar due to those economic urgencies in the EU. But once the European economy stabilized, the EUR/CAD exchange rate also found its equilibrium. The two economies are tightly intertwined, so when one experiences a crisis, the other tends to benefit—though eventually they move back into sync.

As for inflation, which was the biggest factor of uncertainty: the Eurozone started 2024 with inflation below 3%, down from that worrying 5.3% in mid-2023. Canada had already been close to a year with inflation stabilized around 3%, similar to the United States. This convergence in inflation levels directly contributed to the expected exchange-rate stability.

Interest rates also played a crucial role. Both Europe and Canada adopted similar measures to contain inflation, which kept their interest rates aligned and helped support that FX balance. Even though inflation remained contained, a gradual rate cut during 2024 was expected—and that’s exactly what happened without creating major mismatches.

Regarding the Canadian dollar forecast for 2024–2025 that was being discussed at the time, analysts estimated a range between 0.60 (a favorable scenario for the euro) and 0.79 (an unfavorable scenario for the euro), with a reference average value of 0.70. The reality was that the pair stayed fairly close to that central estimate.

Canada had several factors working in its favor: contained inflation, high interest rates, an AAA debt rating, and guaranteed hydrocarbon exports to Europe under new post-Ukraine contracts. However, the euro was in the midst of a strong, robust recovery, which limited the CAD’s upside potential in the short term.

What actually happened was that the CAD’s relative decline responded more to the momentum of the European currency than to specific problems in Canada. The euro simply recovered strongly from its 2022 lows, bringing the pair back to its normal historical values.

From today’s perspective in 2026, it’s clear that investing in this pair required understanding that the swings would be moderate and predictable. With economies this closely linked, large gaps in relative value are rare. That gives investors some confidence when looking to benefit from price changes, but without expecting spectacular moves.

The lesson from all of this is that when analyzing EUR/CAD behavior, the key was recognizing that after geopolitical and economic turbulence, both currencies tend to return to their historical equilibrium. And that’s exactly what happened during 2024 and 2025.