|

Euro advances against Canadian Dollar as Eurozone Investor Confidence rises in August

  • EUR/CAD holds ground as Eurozone’s Sentix Investor Confidence rises in August for the first time in five months.
  • Higher oil prices could lend support to the commodity-linked Canadian Dollar.
  • Crude oil prices rebound due to uncertainty over reopening the Strait of Hormuz.

EUR/CAD inches higher after three days of losses, trading around 1.6120 during the European hours on Monday. The currency cross is holding its ground, driven primarily by a resilient Euro (EUR) following positive Eurozone economic sentiment.

The Eurozone's Sentix Investor Confidence data, a key indicator of investor morale, rose to 0.9 in August, marking its first positive reading in five months. Investor sentiment had previously dropped into negative territory in March with the onset of the Middle East conflict, though it showed signs of recovery by reaching -3.1 in July.

The upside potential for the EUR/CAD pair could be restrained by support for the commodity-linked Canadian Dollar (CAD) amid higher oil prices. West Texas Intermediate remains in the positive territory and is trading around $77.20 per barrel at the time of writing.

Crude oil prices rebounded as persistent uncertainty surrounds efforts to reopen the critical Strait of Hormuz. Over the weekend, Iran stated that talks with Oman to establish a safe shipping route through the strategic waterway are nearing an agreement, though Tehran cautioned that any deal would not result in an immediate reopening.

Meanwhile, regional security remains fragile; Iran-backed Houthi militants in Yemen claimed a recent attack on Saudi Arabia’s Jazan refinery, and a tanker operated by the Abu Dhabi National Oil Co. came under attack in the Strait.

Oil volatility keeps Middle East risks in focus for credit markets

HSBC Asset Management observes that a “recent pick-up in oil price volatility has kept the Middle East conflict front of mind for markets,” noting that while crude remains “the most visible channel,” the implications run deeper for corporate borrowers. The bank stresses that for credit investors “a big question” is not just the headline move in energy prices, but “how and where the disruption could lead to supply shortages across industries and supply chains,” particularly in sectors reliant on petrochemicals, fertilisers and industrial gases.

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

More from Akhtar Faruqui
Share:

Editor's Picks

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold eyes worst week in a month amid hawkish Fed outlook

Gold is extending Thursday’s late rebound from the weekly low of $4,244 into Asia on Friday, but remains below $4,300. The bullion is headed for its worst week in four weeks amid a hawkish US Federal Reserve outlook and deepening global bond rout.

Crypto exchange Bitget hacked for over $350 million
Cryptocurrency exchange Bitget has been hacked for over $351 million after attackers compromised a few of its hot wallets. The hack was first flagged across several onchain tools, which initially noted over $180 million in assets moving from a few of the exchange's wallets to unidentified addresses.
Treasury announces second oversized bond buyback as it tries to put a lid on yields

The Treasury Department will buy back another $6 billion in long-term Treasuries as it continues efforts to tamp down rising yields. Treasury Secretary Scott Bessent announced this second expanded buyback on Wednesday.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.