• Final German HICP confirmed a 0.1% monthly contraction and 2.8% year-on-year growth for October.
• EUR/CAD holds ground as lower crude prices weaken the commodity-linked Canadian Dollar.
• WTI falls amid easing US-Iran tensions and potential diplomatic settlement options.

EUR/CAD inches higher after posting minor losses in the previous day, trading around 1.5840 during European hours on Wednesday. The currency cross holds ground following the release of final German inflation data.

Final German Harmonized Index of Consumer Prices (HICP) data confirmed preliminary estimates of a 0.1% monthly contraction and 2.8% year-on-year growth in October. These figures follow 0.6% and 3.3% respective increases in September, confirming initial estimates.

European sovereigns track US selloff as ECB path repriced

Analysts at Deutsche Bank highlight that “earlier in Europe, there was a major selloff for sovereign bonds too, although not quite as big as in the US,” as investors moved to price a more hawkish ECB trajectory. They note that yields on Bunds, OATs and BTPs rose sharply, with markets pushing the probability of a December ECB hike close to fully priced and adding further tightening out to the June 2027 meeting.

The EUR/CAD cross holds ground as the commodity-linked Canadian Dollar (CAD) struggles amid lower oil prices. West Texas Intermediate (WTI) oil price continues to lose ground for the fourth successive day, trading around $85.20 per barrel at the time of writing.

Crude oil prices depreciate following signs of easing tensions between the US and Iran. US President Donald Trump suggested that additional military strikes against Iran may no longer be necessary, fueling optimism for a potential diplomatic settlement. Meanwhile, Congressional Democrats are considering using the upcoming government funding deadline to push the Trump administration toward ending the conflict.