Key Moments
- EUR/CAD trades near 1.6060 after four consecutive daily declines during European hours on Tuesday.
- WTI crude hovers around $92.50 per barrel as supply concerns rise following US self-defense strikes in southern Iran on Monday.
- Despite pressure on the Euro, hawkish expectations for the ECB and upcoming German inflation data may help limit further downside.
EUR/CAD Under Pressure as Oil-Sensitive CAD Firmly Bid
EUR/CAD continues to retreat, extending a run of four straight sessions in the red and trading around 1.6060 during the European session on Tuesday. The cross is weighed down by strength in the Canadian Dollar, which is finding support from firmer crude oil prices.
The Canadian Dollar is closely tied to energy markets, as Canada is one of the world’s largest crude oil producers and exporters. The energy industry accounts for a substantial share of the country’s overall economic activity, making the currency particularly responsive to moves in oil.
WTI Rebounds on Fresh Supply Concerns
West Texas Intermediate (WTI) crude recovers after its own four-day losing streak, with prices trading around $92.50 per barrel at the time of writing. The move higher in oil comes on the back of renewed worries about supply after United States forces carried out self-defense strikes in southern Iran on Monday.
According to a US Central Command spokesperson, the operations targeted missile launch sites and Iranian vessels that were attempting to deploy mines. The US military highlighted its focus on protecting its forces and stressed that it remains restrained during the ceasefire. At the same time, US President Donald Trump noted that talks aimed at ending the conflict and reopening the Strait of Hormuz were “proceeding nicely.”
Euro Faces Safe-Haven Flows but ECB Hawkishness Offers Support
The EUR/CAD pair is also being pressured by broader risk sentiment, as the Euro struggles in an environment of elevated safe-haven demand. Even so, downside for the common currency may be cushioned by expectations that the European Central Bank will maintain a hawkish stance on monetary policy.
Market participants are now looking toward the preliminary reading of Germany’s inflation figures, scheduled for release on Friday, for further direction on the Euro and potential implications for ECB policy.
On Tuesday, ECB Executive Board member Isabel Schnabel reinforced the hawkish tone, stating that the central bank should raise interest rates in June, regardless of whether ongoing peace talks with Iran deliver an agreement. She argued that the conflict has already lasted far longer than previously anticipated and that elevated energy prices are feeding into the broader economy.
Euro Performance Against Major Currencies
The following table shows the percentage change of the Euro against a basket of major currencies today. According to the data, the Euro has been weakest versus the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | 0.21% | 0.19% | 0.00% | 0.15% | 0.49% | 0.23% | |
| EUR | -0.08% | 0.16% | 0.11% | -0.06% | 0.10% | 0.44% | 0.15% | |
| GBP | -0.21% | -0.16% | -0.04% | -0.21% | -0.05% | 0.27% | 0.00% | |
| JPY | -0.19% | -0.11% | 0.04% | -0.18% | -0.01% | 0.29% | 0.06% | |
| CAD | -0.01% | 0.06% | 0.21% | 0.18% | 0.17% | 0.50% | 0.24% | |
| AUD | -0.15% | -0.10% | 0.05% | 0.01% | -0.17% | 0.32% | 0.06% | |
| NZD | -0.49% | -0.44% | -0.27% | -0.29% | -0.50% | -0.32% | -0.27% | |
| CHF | -0.23% | -0.15% | -0.00% | -0.06% | -0.24% | -0.06% | 0.27% |
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