Euro remains stronger against Canadian Dollar following Eurozone Unemployment Rate

EUR/CAD rises after two days of losses, trading around 1.6200 during the European hours on Thursday. The pair remains stronger as the Euro (EUR) holds ground following the release of the Eurozone Unemployment Rate, which came in at 6.2% in May, against the 6.3% expected. The previous reading was revised to 6.2% from 6.3%.

Diverging views emerged from European Central Bank (ECB) officials on Wednesday regarding the path of interest rates. Belgian central bank chief Pierre Wunsch stated he does not favor further monetary policy tightening, noting that any inflation surprises ahead of the July meeting are more likely to skew to the downside. Conversely, ECB Governing Council member Martin Kocher suggested that the central bank's next move will either be a rate hike or a hold, warning that rising wages could keep inflationary pressures stubbornly elevated.

The EUR/CAD cross may further appreciate as the commodity-linked Canadian Dollar (CAD) could face challenges amid falling oil prices. Global crude benchmarks have experienced a sharp downturn, sliding significantly below recent highs as supply anxieties begin to ease.

This energy market decline is primarily driven by a rapid recovery in maritime shipping traffic through the critical Strait of Hormuz, coupled with notable breakthroughs in indirect diplomatic talks between Washington and Tehran. While lower energy prices have helped soothe inflation concerns, they simultaneously sap the strength of the petro-dependent CAD.

Statistics Canada indicated earlier this week that the economy grew by 0.5% in April, rebounding more robustly than anticipated following a mild contraction in March. Furthermore, an advance estimate pointing to an additional 0.1% monthly expansion in May suggests that national growth may be stabilizing, a trend that has successfully eased investor fears over a deeper, tariff-driven economic slowdown.