Eurozone trade balance swung to a €7.8 billion deficit in May, but ECB policymakers’ hawkish tone supports the Euro against the CAD.
EUR/CAD climbed to around 1.6100 in European trading Thursday, extending gains for a second day. The Euro held firm despite a €7.8 billion trade deficit in May, down from a €1.3 billion surplus in April, as hawkish commentary from ECB officials offset weak industrial production data.
ECB board members Marin Kocher and Joachim Nagel signaled readiness to act decisively on inflation if needed, keeping rate hike expectations alive. Meanwhile, the Canadian Dollar weakened amid falling crude prices, despite escalating US-Iran tensions threatening energy supplies.
The cross gained traction as the Euro’s resilience contrasted with broader commodity-linked currency pressures. Oil prices eased, further weighing on the CAD despite geopolitical risks in the Strait of Hormuz.