The EUR/CAD pair is trading close to the 1.6200 level during Monday’s Asian session, recovering slightly from earlier losses. Despite the minor rebound, the pair remains under pressure as the Euro continues to struggle in a risk-averse market environment.
Investor sentiment has turned cautious after the latest round of US–Iran peace talks ended without any agreement. US Vice President JD Vance confirmed that negotiations in Islamabad concluded unsuccessfully after nearly 21 hours of discussions. Adding to market concerns, President Donald Trump announced that a blockade on ships entering and exiting Iranian ports would take effect on April 13 at 10:00 AM ET.
Meanwhile, inflation in the Eurozone has picked up pace, rising to 2.5% in March — its highest level since January 2025 — largely driven by higher energy costs. This remains above the European Central Bank’s 2% target. ECB President Christine Lagarde reiterated that monetary policy will stay restrictive until inflation shows a sustained move back toward the target level.
Analysts at Nordea, including Jan von Gerich and Tuuli Koivu, have projected four rate hikes of 25 basis points starting from June. They highlighted that underlying inflation pressures remain strong, and even a potential easing of geopolitical tensions may not remove the need for further tightening.
On the other hand, the Canadian Dollar is finding support from rising oil prices, which is typical given Canada’s strong position as a major crude exporter to the United States. Oil prices have surged more than 7%, with West Texas Intermediate (WTI) trading near $96.90 per barrel. The rally in crude is fueled by escalating US–Iran tensions and growing fears of a possible disruption in the Strait of Hormuz.
