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EUR/CAD holds losses near 1.6200 as Canadian Dollar gains on risk-on mood

  • EUR/CAD weakens as the Canadian Dollar gains support despite softer oil prices.
  • Washington and Tehran are weighing an extension of their two-week ceasefire to gain more time for peace negotiations.
  • Middle East de-escalation boosts risk appetite, while falling oil prices ease inflationary pressures in the Eurozone.

EUR/CAD remains subdued for the second successive day, trading around 1.6200 during the Asian hours on Thursday. The currency cross depreciates as the Canadian Dollar (CAD) receives support from easing Middle East conflict. However, the commodity-linked CAD may come under pressure from softer oil prices. It is worth noting that Canada is the largest crude exporter to the United States.

Reports indicated that Washington and Tehran are considering extending their two-week ceasefire to allow more time for peace negotiations, even as the Strait of Hormuz remains effectively closed under a dual blockade. However, Tehran may allow vessels to pass freely through the Omani side of the Strait if an agreement is reached to prevent a renewed escalation in hostilities.”

However, the Euro (EUR) also holds ground against its major peers amid improved market sentiment, driven by expectations of a potential de-escalation in the Middle East conflict. US President Donald Trump stated that the war was “close to over.” Reports, including those from Bloomberg, indicated speculation about a possible two-week extension of a ceasefire, although Trump dismissed the necessity of such a move, citing ongoing negotiations aimed at ending the conflict.

“Signs of de-escalation in the Middle East have boosted risk appetite, with declining oil prices helping to ease inflationary pressures in Eurozone. Policymakers at the European Central Bank (ECB) are inclined to keep interest rates unchanged at the April policy meeting. ECB President Christine Lagarde said this week that the central bank must remain “completely agile” on rates, while emphasizing that it does not hold a bias toward tightening. Nevertheless, traders continue to view rate hikes as unavoidable, pricing in two quarter-point increases this year.

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CAD strengthens as risk-on mood weighs on US Dollar

  • USD/CAD falls as the US Dollar weakens on improved sentiment amid Middle East de-escalation hopes.
  • Trump said the war is “close to over,” with reports suggesting a possible two-week ceasefire extension.
  • Easing energy prices eased inflation concerns and reduced expectations of further tightening.

USD/CAD loses ground for the fourth successive day, trading around 1.3730 during the Asian hours on Thursday. The pair depreciates as the US Dollar (USD) continues to lose ground on improved market sentiment, driven by expectations of a potential de-escalation in the Middle East conflict.

US President Donald Trump stated that the war was “close to over.” A Bloomberg report indicated speculation about a possible two-week extension of a ceasefire, although Trump dismissed the necessity of such a move, citing ongoing negotiations aimed at ending the conflict.

The Greenback faced additional pressure from easing energy prices, which helped ease inflation concerns and tempered expectations of further central bank tightening. The Federal Reserve (Fed) is widely anticipated to hold interest rates steady this month and possibly for the rest of the year.

However, the downside of the USD/CAD pair could be restrained as the commodity-linked Canadian Dollar (CAD) may face challenges with easing oil prices. It is important to note that Canada is the largest crude exporter to the United States (US).

Reports suggested that Washington and Tehran are considering extending their two-week ceasefire to allow more time for peace negotiations, even as the Strait of Hormuz remains effectively shut under a dual blockade. However, Tehran may permit vessels to transit freely via the Omani side of the Strait if an agreement is reached to prevent a renewed escalation in hostilities.

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USD/CAD gains ground above 1.3700 while outlook remains uncertain amid Iran optimism

  • USD/CAD edges up to near 1.3780; outlook remains worsened on hopes of US-Iran permanent ceasefire.
  • US President Trump expresses confidence that the war with Iran is close to over.
  • Investors await the announcement of another round of US-Iran talks.

The USD/CAD pair trades slightly higher to near 1.3780 during the European trading session on Wednesday. The Loonie pair gained a temporary ground after posting a fresh three-week low near 1.3730 on Tuesday; however, the outlook remains uncertain amid hopes that the United States (US) and Iran could reach a permanent ceasefire soon.

Earlier in the day, US President Donald Trump said in an interview with Fox News, “I view it as very close to over,” when asked how long the war with Iran will continue.

Meanwhile, US Vice President (VP) JD Vance has also expressed confidence, in a public event, that both sides are working towards a deal, and talks are taking place via channels including Pakistan. Vance added, “Discussions have made tremendous progress, and the current ceasefire holds for a seventh consecutive day.”

During the press time, market sentiment remains risk-on amid hopes of a US-Iran ceasefire. S&P 500 futures hold onto Tuesday’s gains near 6,970. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.1% higher to near 98.20, but is still close to its over six-week low of 97.97 posted on Tuesday.

US Dollar Price Last 7 Days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-1.61%-1.98%-0.40%-0.77%-2.19%-2.80%-2.03%
EUR1.61%-0.39%1.20%0.80%-0.63%-1.22%-0.45%
GBP1.98%0.39%1.62%1.23%-0.26%-0.83%-0.05%
JPY0.40%-1.20%-1.62%-0.38%-1.83%-2.53%-1.62%
CAD0.77%-0.80%-1.23%0.38%-1.36%-2.15%-1.23%
AUD2.19%0.63%0.26%1.83%1.36%-0.71%0.20%
NZD2.80%1.22%0.83%2.53%2.15%0.71%0.89%
CHF2.03%0.45%0.05%1.62%1.23%-0.20%-0.89%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Going forward, investors will focus on the outcome of the second round of US-Iran talks, whose date has not been confirmed, but will likely take place before the expiration of the two-week ceasefire on April 21, according to Reuters.

On the domestic front, traders do not expect the Federal Reserve (Fed) to raise interest rates this year anymore amid optimism on the US-Iran truce.

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Canadian Dollar remains stronger as risk-on mood weighs on US Dollar

  • USD/CAD struggles as reports suggest further US–Iran talks to secure a longer-term ceasefire.
  • President Trump said Tehran initiated contact, while Iranian President Masoud Pezeshkian signaled willingness for lawful dialogue.
  • Canadian Prime Minister Mark Carney secured a parliamentary majority for his Liberal government on Monday.

USD/CAD remains subdued for the second consecutive day, trading around 1.3790 during the Asian hours on Tuesday. The pair weakens as the US Dollar (USD) struggles amid eased risk aversion following reports that the United States (US) and Iran may hold further talks to secure a longer-term ceasefire before the current two-week truce ends.

US President Donald Trump said that Iran had made contact and is now looking to resume negotiations. Vice President JD Vance also indicated ongoing diplomatic efforts and a possible path toward US-Iran conflict de-escalation. Vance stated that recent discussions over the weekend were constructive, providing US officials with deeper insight into Iran’s negotiating stance.

The Greenback weakens as markets scale back hawkish Federal Reserve (Fed) bets, with easing inflation risks tied to a potential long-term US–Iran ceasefire and a possible reopening of the Strait of Hormuz, which has pressured oil prices.

Meanwhile, Fed Governor Stephen Miran said the Iran-related energy shock has not yet affected long-term inflation expectations, adding he expects price pressures to return to the central bank’s target within a year.

The downside of the USD/CAD pair could be restrained as the commodity-linked Canadian Dollar (CAD) could face challenges amid lower oil prices, given the fact that Canada is the largest crude exporter to the United States. Crude oil prices fall as supply concerns ease after reports of US-Iran further talks.

In Canada, CBC News reported that Prime Minister Mark Carney secured a parliamentary majority for his Liberal government on Monday, strengthening his ability to advance legislation aimed at navigating a more divided geopolitical landscape. The victory gives Carney’s Liberals 172 seats in the 343-seat House of Commons.

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EUR/CAD caps near 1.6200 as Euro struggles due to risk-off mood

  • EUR/CAD stays silent as risk aversion rises following the failure of US–Iran peace talks.
  • Nordea analysts say resolving the US–Iran conflict wouldn’t remove the need for ECB tightening.
  • CAD may gain as oil prices rise amid renewed fears of a Strait of Hormuz blockade.

EUR/CAD holds position after paring its intraday losses, trading around 1.6200 during the Asian hours on Monday. However, the currency cross still remains in the negative territory as the Euro (EUR) struggles amid increased risk aversion after the failure of the United States (US)-Iran peace talks.

US Vice President JD Vance confirmed the US–Iran talks in Islamabad ended without a deal following 21 hours of negotiations. President Donald Trump confirmed on Truth Social that the blockade of ships entering and exiting Iranian ports will begin today, April 13, at 10:00 AM ET (14:00 GMT).

Eurozone annual inflation rose to 2.5% in March, the highest since January 2025, exceeding the European Central Bank’s (ECB) 2% target amid rising energy prices. ECB President Christine Lagarde emphasized that policy will remain restrictive until inflation sustainably returns to target.

Nordea’s Jan von Gerich and Tuuli Koivu, in their pre-ceasefire ECB outlook, projected four 25-basis-point rate hikes starting in June. They emphasize that broader price pressures persist and that even a resolution to the conflict would not eliminate the need for ECB tightening.

The EUR/CAD cross also struggles as the commodity-linked Canadian Dollar (CAD) may receive support from the rising oil prices, given Canada’s status as the largest crude exporter to the United States (US).

West Texas Intermediate (WTI) oil price trades over 7% higher near $96.90 per barrel at the time of writing. Crude oil prices rise as US–Iran tensions re-escalate and fears grow over a potential Strait of Hormuz blockade.

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CAD pares losses vs USD as rallying oil prices counter hawkish Fed bets

  • USD/CAD struggles to build on its modest gains amid a combination of factors.
  • The door for further diplomacy remains open, capping the USD and the major.
  • Rallying Oil prices underpin the Loonie and act as a headwind for spot prices.

The USD/CAD pair retreats a few pips from the Asian session high and currently trades around the 1.3860-1.3855 region, up around 0.15% for the day. Meanwhile, the mixed fundamental backdrop warrants caution before positioning for an extension of a modest recovery from sub-1.3800 levels, or over a two-week low set on Friday.

The US Dollar (USD) struggles to capitalize on the weekly bullish gap opening amid reports that regional countries are racing to bring the US and Iran back to the negotiating table within days. This keeps the door open for further diplomacy and caps the safe-haven Greenback. Moreover, an intraday rally in Crude Oil prices underpins the commodity-linked Loonie and contributes to capping the USD/CAD pair.

West Texas Intermediate (WTI) – the benchmark US Crude Oil price – rallies back to the $105/barrel mark in reaction to failed US-Iran peace talks over the weekend. In fact, US Vice President JD Vance said that he placed a final and best offer on the table, but Iran declined to accept the terms, leading to a stalemate. Meanwhile, Iranian state media said that excessive demands sank the possibility of an agreement.

Furthermore, US President Donald Trump said that the US Navy would start blockading the Strait of Hormuz, jeopardizing a fragile two-week ceasefire. Adding to this, continued Israeli strikes in Lebanon raise the risk of a renewed escalation of tensions in the Middle East and support oil prices. However, hawkish US Federal Reserve (Fed) bets should limit deeper losses for the buck and the USD/CAD pair.

Data released on Friday showed that inflation in the US surged by the most in nearly four years during March. Apart from this, the war-driven surge in elevated energy prices led investors to abandon bets on Fed rate cuts and shift focus to potential interest rate hikes this year. The outlook triggers a fresh leg up in US Treasury bond yields, which favors the USD bulls and acts as a tailwind for the USD/CAD pair.

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CAD declines as oil prices ease, US Dollar gains

  • USD/CAD rises as the commodity-linked Canadian Dollar weakens amid falling oil prices.
  • WTI drops over 11.5% this week after the US–Iran agreed to a two-week ceasefire, easing supply concerns.
  • US official confirms Lebanon–Israel talks will be held next week in Washington, DC.

USD/CAD gains ground after four days of losses, trading around 1.3820 during the Asian hours on Friday. The pair appreciates as the commodity-linked Canadian Dollar (CAD) struggles amid lower oil prices, given Canada’s status as the largest crude exporter to the United States (US).

West Texas Intermediate (WTI) oil price holds losses after experiencing volatility, trading around $91.80 per barrel at the time of writing. The WTI price is down by over 11.5% for the week, at the time of writing, after the US and Iran agreed to a two-week ceasefire.

However, crude oil prices may regain ground as Israeli strikes on Lebanon and the ongoing closure of the Strait of Hormuz strain diplomatic efforts. Israeli Prime Minister Benjamin Netanyahu said that there is “no ceasefire in Lebanon” and Israel would continue “to strike Hezbollah with full force” as the country’s military launched fresh strikes.

Reuters reported that a US State Department official confirmed that talks between Lebanon and Israel will take place next week in Washington, DC. “We can confirm that the Department will host a meeting next week to discuss ongoing ceasefire negotiations with Israel and Lebanon,” said a US official.

US Federal Reserve’s (Fed) March Meeting Minutes suggest the central bank remains in a wait-and-see stance, while acknowledging that inflationary risks linked to higher oil prices are becoming more balanced. Traders await the US Consumer Price Inflation (CPI) report due later in the North American session.

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Currency Talk – EUR/CAD NZD/USD, USD/JPY

The Overbalance analysis aims to identify three financial instruments, analyzed primarily on the daily/four-hour (D1/H4) timeframe. The analysis uses only the Overbalance methodology, which helps determine where a trend may continue or where it may reverse.
Today’s analysis covers three instruments, evaluated solely in terms of 1:1 correction structures.

EURCAD
At the end of March, EURCAD prices broke out of a major 1:1 downtrend pattern at the 1.5948 level, paving the way for further gains. We are currently seeing a continuation of the uptrend, and counting from the March 9 low, we can identify a local 1:1 uptrend pattern. In the event of a correction, the key short-term support remains at the 1.6020 level, where the lower boundary of this pattern is located. Conversely, only a return of the price below 1.5948 could suggest a shift to a downtrend. For now, sentiment remains bullish.

EURCAD – H4 timeframe. Source: xStation

NZDUSD
Since February of this year, NZDUSD has been trending downward, with the market repeatedly forming corrections of similar magnitude. We are currently observing a test of the key resistance level resulting from the 1:1 Fibonacci retracement at 0.5828. A sustained break below this level could lead to a shift in sentiment toward an uptrend. On the other hand, defending this level and keeping the price within the downtrend could result in a return to declines and a test of recent lows at 0.5680. The current zone is of critical importance in the short term.

NZDUSD – H4 chart. Source: xStation

USDJPY
Since mid-February, USDJPY has been in a strong uptrend. Recently, one of the larger corrections occurred, covering a range of approximately 240 pips. The current correction has the same range as the previous one, marked in green, which allows us to identify key support at the 158.10 level, based on a 1:1 ratio. If this level holds, there is a chance for the uptrend to resume and for new highs to be tested. Conversely, a break below this level could lead to a trend reversal and a deepening of the decline.

USDJPY – H4 chart. Source: xStation

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