Higher crude oil prices pressure EUR/CAD as Euro loses ground against Canadian Dollar

EUR/CAD weakens as a supply-driven surge in oil prices supports the Canadian Dollar.
Crude prices rally amid Middle East tensions and drone attacks on Saudi Aramco's Shaybah oil field.
Sentiment is behind the Euro's latest fall, according to Danske Bank, with high energy prices and concerns over French debt weighing on the currency.

Pressure on EUR/CAD persists as a sharp rise in crude prices strengthens the commodity-linked Canadian Dollar (CAD). The cross is trading near 1.5750 in Thursday's European session, extending its decline to a third consecutive day. The surge in energy markets followed a drone strike on Saudi Aramco’s Shaybah oil field, which killed two people. The attack heightened Middle East geopolitical tensions and revived concerns about disruptions to global supplies.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Against this backdrop of mounting regional tensions, Iranian Foreign Minister Abbas Araghchi said the United States must lift its naval blockade and show a genuine commitment to resolving the conflict diplomatically. Tehran is prepared to return to negotiations, Araghchi affirmed, if Washington provides tangible proof of a sincere attempt to achieve a lasting and equitable end to the conflict.

Tensions have also escalated in Eastern Europe following a series of large-scale Ukrainian drone attacks on key Russian oil facilities. Through this military campaign, Kyiv is signalling a clear determination to disrupt Moscow's planned increase in diesel exports, arranged under a recent agreement between Presidents Trump and Putin.

For Danske Bank strategists, sentiment largely explains the Euro's latest retreat. They emphasise 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 assessment, these pressures have deepened the caution already surrounding the single currency. Investors remain reluctant to increase Euro exposure, even though broader markets have offered no clear catalyst for a directional move.

How will the ECB's three-pronged response address market-led Eurozone tightening?

Responsibility is moving back towards policymakers as markets effectively tighten financial conditions through the sell-off in Eurozone bonds triggered by French fiscal concerns, ING economists argue. The bank states 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,” involving more dovish messaging on interest rates, changes to balance sheet plans and, where necessary, targeted deployment of existing backstop tools.

How Is the Euro Performing Today?

The Euro's weakest performance today was against the Japanese Yen. Its percentage moves against the major currencies listed are set out in the table below, with the Euro denoted by EUR.

	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 that row across to the US Dollar gives the percentage change for EUR (base)/USD (quote) in the corresponding cell.