EUR/CAD holds losses below 1.6000 following PMI data from Germany, Eurozone
By Akhtar Faruqui
Updated: 23 Apr 2026
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EUR/CAD extends its losing streak for the seventh consecutive day, trading around 1.5980 during the European hours on Thursday. The currency cross remains in the negative territory following the release of Purchasing Managers’ Index (PMI) data from Germany and the Eurozone.
- EUR/CAD remains subdued as Eurozone Composite PMI falls to 48.6 in April, missing expectations of 50.2.
- Germany’s flash Composite PMI fell to 48.3; Services dropped to 46.9, while Manufacturing rose to 51.2.
- The commodity-linked CAD gains support from higher oil prices amid Strait of Hormuz supply concerns.
EUR/CAD extends its losing streak for the seventh consecutive day, trading around 1.5980 during the European hours on Thursday. The currency cross remains in the negative territory following the release of Purchasing Managers’ Index (PMI) data from Germany and the Eurozone.
The Eurozone’s preliminary HCOB Composite PMI unexpectedly fell to 48.6 in April, missing expectations of a rise to 50.2 from 50.7 in March. The Services PMI contracted more sharply to 47.4 versus forecasts of 49.8 from a prior 50.2, while the Manufacturing PMI improved to 52.2 from 51.6.
Germany’s flash Composite PMI also surprised to the downside, dropping to 48.3 in April against expectations of 51.1, compared to 51.9 in March. The Services PMI declined to 46.9, below estimates of 50.3 and the previous 50.9 reading. Meanwhile, the Manufacturing PMI expanded again, albeit at a slower pace, printing at 51.2 versus expectations of 51.3 and the prior 52.2.
The EUR/CAD cross lost ground as the commodity-linked Canadian Dollar (CAD) is supported by higher oil prices amid rising supply concerns on ongoing Middle East uncertainty and the blockade of the Strait of Hormuz.
West Texas Intermediate (WTI) oil price gains ground for the fourth consecutive day, trading around $93.40 per barrel at the time of writing. The Wall Street Journal reported that Iran fired on three ships in the Strait of Hormuz and escorted two of them into Iranian waters on Wednesday.
Iranian media reported that the paramilitary Revolutionary Guard was moving the vessels to Iran, marking a further escalation. Iranian parliament speaker and chief negotiator Mohammad Bagher Ghalibaf stated that reopening the strait would be “impossible” while the United States (US) and Israel persist with what he described as “flagrant” ceasefire violations, including the US naval blockade.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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