Euro strengthens against Canadian Dollar as German HICP inflation accelerates, oil eases

German HICP jumped to a 2024 peak of 3.3% in September, driven by rising energy costs.
The Euro gained ground against the Canadian Dollar, which faced pressure from falling global crude oil prices.
Oil prices slid after US sanction waivers on Russian diesel exports promised to ease tight global markets.

Akhtar Faruqui FXStreet

EUR/CAD recovers its recent losses from the previous day, trading around 1.5950 during European hours on Tuesday. The currency cross appreciates as the Euro (EUR) gains support following the release of Harmonized Index of Consumer Prices (HICP) inflation data from Germany.

Germany’s Harmonized Index of Consumer Prices rose to 3.3% year-on-year in September, meeting expectations and marking a clear acceleration from 2.9% in August 2026 and 2.8% in July 2026. Destatis President Ruth Brand noted that inflation crossed the 3% mark to reach its highest level since December 2023, driven primarily by surging energy costs, particularly heating oil and motor fuels at filling stations. On a month-over-month basis, total consumer prices increased by 0.6%.

Moreover, the EUR/CAD cross currency pair remained firm, supported by weakness in the commodity-linked Canadian Dollar (CAD) as global crude oil prices declined. Oil markets faced downward pressure as traders weighed potential new Russian fuel supplies against ongoing geopolitical risks.

The drop in crude oil followed an announcement by US President Donald Trump that Russia had agreed to supply diesel to global markets. In response, the US administration temporarily eased sanctions on Russian fuel, measures originally implemented to limit Moscow's revenue during its war in Ukraine, in an effort to relieve tight global market conditions and curb rising energy prices.

Brent shrugs off ceasefire headlines as supply risks keep prices elevated

Strategists at ING observe that the recent pullback in crude following President Trump’s announcement of an energy ceasefire between Russia and Ukraine proved fleeting, with “the weakness in the oil market…short-lived.” They add that “that goes, too, for the US-Russia diesel export deal,” as traders quickly refocused on broader supply risks. Reflecting this resilience, ING notes that “ICE Brent settled 1.8% higher, just shy of $107/bbl yesterday — the highest close since mid-September,” underscoring that Middle East and Persian Gulf supply concerns continue to dominate price action despite the ceasefire headlines.

Economic Indicator

Harmonized Index of Consumer Prices (YoY)

The Harmonized Index of Consumer Prices (HICP), released by the German statistics office Destatis on a monthly basis, is an index of inflation based on a statistical methodology that has been harmonized across all European Union (EU) member states to facilitate comparisons. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is bullish for the Euro (EUR), while a low reading is bearish.

AUD/USD remains depressed near 0.6950 after RBA minutes

AUD/USD attracts follow-through selling during Tuesday’s Asian session, looking to extend the overnight rejection slide from 0.7000, or a two-week top, following the release of RBA meeting Minutes. The US Dollar retains a bullish undertone near its highest level since April 2025 as energy-driven inflation risks keep December Fed rate hike bets firmly on the table. Adding to this, geopolitical risks further underpin the safe-haven USD.

USD/JPY extends retreat below 158.50 as intervention risks loom

USD/JPY is dropping below 158.50 in the Asian session on Tuesday, snapping a two-day winning streak and pulling back from an over two-week top touched the previous day, despite Japan's soft PPI inflation print. Bulls turn cautious amid speculation that authorities will step in to prop up the Japanese Yen, which, in turn, weighs on the pair.

Gold bulls seem hesitant below $4,200 as hawkish Fed offset USD weakness

Gold retains a mildly positive bias though it remains capped below the $4,200 mark and the top boundary of a two-week-old trading range. The US Dollar retreats from its highest level since April 2025 amid some profit-taking, offering support to the precious metal. However, the US Federal Reserve's hawkish stance and escalating Middle East conflicts could limit deeper losses for the safe-haven buck, keeping a lid on the commodity and warranting some caution for aggressive bulls.

Solana reclaims 50-day EMA amid tokenization expansion

Solana (SOL) trades above $107 on Tuesday, reclaiming the 50-day EMA after closing below it the previous day. Meanwhile, Solana’s tokenization expansion and the upcoming listing of Hong Kong’s second spot Solana Exchange Traded Fund highlight growing institutional interest.

Dollar corrects as markets watch bank earnings

The US Dollar remains broadly strong but is now correcting, with a possible retest of the breakout zone around 102 on the Dollar Index. Equity markets are showing a mixed picture: the S&P 500 and Nasdaq are weaker, while blue-chip indices such as the Dow Jones and DAX are moving higher.

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