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- 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.
