EUR/CAD continues to move lower for the third direct session trading near 1.5920 during Friday Asian session. The pair is under stress as the Euro weakens mostly due to rising risk aversion linked to ongoing tensions in the Middle East.
On Thursday US President Donald Trump said the naval siege of Iranian ports would remain in place. This comes among growing concerns that the critical Strait of Hormuz may stay closed for a long period. He also blamed attempts by Congress to limit his war powers including a Senate proposal that was rejected earlier according to Bloomberg.
Meanwhile Iran Supreme Leader Mojtaba Khamenei motioned a tough stance stating that Iran would not give up its nuclear or missile programs. He also indicated that the country aims to maintain control over the Strait.
In Europe the European Central Bank kept interest rates unchanged at its April meeting holding the deposit rate at 2%. The bank recognized that while the overall outlook remains stable risks to inflation have high and growth risks are leaning to the downside due to geopolitical tensions.
At the same time the Canadian Dollar is finding support from stronger oil prices which is adding then pressure on EUR/CAD. Although West Texas Intermediate opened lower it managed to recover just and trading around $102.40 per barrel though still in negative territory. Oil prices are on track for a second weekly gain as aims for a US-Iran deal continue to fade and concerns grow that the Strait of Hormuz may not reopen anytime soon.
