Euro Holds Gains Despite Mixed Economic Data

The Euro has maintained its gains against the Canadian Dollar after a mixed bag of economic data out of Germany. Analysts at ING note that Euro-specific fundamentals are still uncertain, with recent data showing some resilience but not translating into clear support for the single currency.

Economic resilience in Europe is being offset by rising eurozone spreads, according to ING, which points out that French 10-year yields are trading 110bp above bunds. This is despite reports that Marine Le Pen may back the proposed budget to avert a bond crisis, leaving political and fiscal concerns as a persistent drag on Euro sentiment.

The EUR/CAD cross has appreciated as the commodity-linked Canadian Dollar faces downward pressure from falling crude oil prices. Crude oil prices dropped after reports that the United States and Iran are considering a phased agreement to reopen the Strait of Hormuz and lift the US blockade on Iranian ports, mediated by Qatari officials.