Rising crude prices bolster the CAD, pressuring the EUR/CAD cross despite potential Euro support from US Treasury policy shifts.
EUR/CAD fell to 1.6110 in European trading Thursday, ending a three-day rally as higher oil prices strengthened the commodity-linked Canadian Dollar. Escalating Middle East tensions and stalled US-Iran negotiations drove crude markets higher, amplifying CAD demand.
The cross had climbed earlier in the week but faced resistance as geopolitical risks intensified. US President Donald Trump noted oil shipments continue through the Strait of Hormuz, though tensions persist. Meanwhile, the Eurozone saw inflows of €1.1 trillion in securities over the past year, per ECB data.
The Euro may regain ground as the US Treasury plans to double buyback limits for long-term notes, injecting dollar liquidity and weighing on the USD. Analysts cite robust foreign demand for Eurozone assets as a supportive factor.