Euro remains weaker against Canadian Dollar as German PPI falls in June

EUR/CAD remains in negative territory after paring daily losses, trading around 1.6030 during the early European hours on Monday. The currency cross depreciates as the Euro (EUR) struggles following the release of Germany’s Producer Price Index (PPI) data.

German PPI rose 1.8% year-over-year (YoY) in June, continuing a three-month trend of producer inflation. However, growth cooled from May’s peak of 2.2%, the highest annual increase since May 2023. On a monthly basis, producer prices dropped 0.3%, reversing May’s 0.3% gain and marking the first monthly decline since February. The drop was slightly steeper than the 0.2% decline markets had expected.

The EUR/CAD cross loses ground as the commodity-linked Canadian Dollar (CAD) receives support from higher oil prices. Any change in oil prices could impact CAD as Canada is one of the largest crude exporters.

Crude oil prices have gained significantly as escalating hostilities between the United States (US) and Iran raise fears of further disruptions to vital oil flows from the Middle East. Oil prices have surged nearly 20% in July as the interim peace agreement between the US and Iran unraveled, the US resumed its blockade of Iranian ports, and Tehran intensified its attacks on shipping vessels near the Strait of Hormuz.

The US has launched its ninth consecutive night of strikes against Iranian targets. In response, Iranian officials declared that the ceasefire between the two nations has been effectively abandoned, opening the door for deepening disruptions to crucial energy pathways through the region's narrow waterways.