Higher crude oil prices weigh on EUR/CAD as Euro slips against Canadian Dollar

A jump in oil prices over energy supply concerns lifts the Canadian Dollar, weighing on EUR/CAD.
Crude prices rally following drone strikes on Saudi Aramco’s Shaybah oil field and tensions in the Middle East.
According to Danske Bank, high energy prices and worries over French debt are fuelling the negative sentiment behind the Euro’s latest fall.

Trading near 1.5750 during Thursday’s European session, EUR/CAD is heading lower for a third consecutive day. A sharp rise in crude oil prices has supported the commodity-linked Canadian Dollar (CAD), pushing the cross down. The energy market rally followed a drone attack on Saudi Aramco’s Shaybah oil field that killed two people, heightening geopolitical tensions in the Middle East and reviving concerns about disruptions to global supply.

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Adding to tensions in the region, Iranian Foreign Minister Abbas Araghchi said the United States must lift its naval blockade and show a genuine commitment to resolving the conflict through diplomacy. Tehran is ready to return to negotiations, Araghchi affirmed, provided Washington supplies concrete evidence of a sincere effort to achieve a lasting and equitable end to the conflict.

In Eastern Europe, meanwhile, a series of large-scale Ukrainian drone strikes on vital Russian oil infrastructure has heightened tensions. The campaign makes clear Kyiv’s intention to disrupt Moscow’s planned increase in diesel exports, arranged under a recent agreement between Presidents Trump and Putin.

Sentiment has been the main force behind the Euro’s latest retreat, according to strategists at Danske Bank, who stress that “the decline in the single currency is driven by the combination of high energy prices and EUR-pessimism on the back of French debt worries.” In their view, these pressures have deepened the caution already surrounding the single currency. Investors remain reluctant to increase Euro exposure, even without a clear directional catalyst from wider markets.

Markets tighten Eurozone financial conditions as ECB considers three-part response

A sell-off in Eurozone bonds driven by France’s fiscal concerns is effectively tightening financial conditions, putting the responsibility back on policymakers, ING economists argue. The bank says that “given the challenges of justifying the activation of TPI at present, we expect the ECB to adopt a three-pronged approach to address the French crisis,” bringing together a more dovish message on interest rates, changes to its balance sheet plans and, where necessary, targeted deployment of its existing backstop tools.

Euro Performs Weakest Against Yen Today

Against the major currencies listed below, the Euro (EUR) recorded its weakest performance today against the Japanese Yen. The table sets out its percentage changes against each currency.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.08%	-0.15%	-0.69%	-0.20%	0.10%	0.12%	-0.48%
EUR	0.08%		-0.08%	-0.62%	-0.16%	0.21%	0.22%	-0.42%
GBP	0.15%	0.08%		-0.53%	-0.08%	0.27%	0.29%	-0.33%
JPY	0.69%	0.62%	0.53%		0.47%	0.78%	0.77%	0.20%
CAD	0.20%	0.16%	0.08%	-0.47%		0.32%	0.34%	-0.26%
AUD	-0.10%	-0.21%	-0.27%	-0.78%	-0.32%		-0.00%	-0.58%
NZD	-0.12%	-0.22%	-0.29%	-0.77%	-0.34%	0.00%		-0.56%
CHF	0.48%	0.42%	0.33%	-0.20%	0.26%	0.58%	0.56%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the Euro on the left and following its row across to the US Dollar gives the percentage change for EUR (base)/USD (quote) in the corresponding cell.