Euro remains stronger against Canadian Dollar following Eurozone Trade Balance data

EUR/CAD extends its gains for the second successive day, trading around 1.6100 during the European hours on Thursday. The currency cross remains stronger as the Euro (EUR) holds ground following the release of seasonally adjusted Eurozone Trade Balance data, which showed a deficit of €7.8 billion in May, swinging from the previous surplus of €1.3 billion.

The Austrian Central Bank Governor and ECB board member Marin Kocher said on Wednesday that he does not see second-round inflationary effects as of now, but that the bank is “ready to act” should that be necessary. At a later time, also on Wednesday, the Bundesbank President and also ECB member Joachim Nagel reiterated that, from the monetary policy perspective, it remains advisable to “act decisively” if needed.

The Euro finds support as hawkish ECB policymaker commentary offsets an unexpected contraction in May's Eurozone Industrial Production, keeping rate hike expectations alive for later this year. This resilience extended to the EUR/CAD cross, which gained traction as the commodity-linked Canadian Dollar weakened under the weight of falling crude prices.

Oil prices ease despite escalating US-Iran tensions and the growing risks to energy supplies moving through the vital Strait of Hormuz. Following a US strike on Iranian coastal defenses and missile sites on Wednesday, triggered by a newly reimposed naval blockade, Tehran warned it could halt regional energy exports, declaring that it is engaged in an "existential war" with the United States.