Euro Holds Ground as Eurozone Growth Data Overrides Oil-Driven CAD Gains
The Euro has maintained its strength against the Canadian Dollar (CAD) for an eighth consecutive day, trading around 1.6170 during European hours on Tuesday.
This stability is attributed to a rise in market risk sentiment, which has been bolstered by US President Donald Trump's decision to call off planned military strikes on Iran. Although tensions between the two nations remain high, with Iranian leadership dismissing the proposed talks as 'unacceptable', the easing of immediate concerns around energy disruption has led to a slight decrease in geopolitical risks.
Additionally, stronger-than-expected economic data from the eurozone has reinforced expectations that the European Central Bank (ECB) may raise interest rates at its upcoming meeting. The region's economy expanded by 0.4% in the second quarter, surpassing forecast estimates and marking its strongest growth since early 2025.
However, potential gains for the EUR/CAD cross may be limited by strength in commodity-linked Canadian Dollar (CAD), driven by ongoing tensions in the Middle East and rising crude oil prices. West Texas Intermediate (WTI) crude has gained over 2% to trade around $80.50 per barrel, providing underlying support for the CAD.