Euro holds losses against Canadian Dollar following Eurozone HICP data

The Euro (EUR) experienced a decline against the Canadian Dollar (CAD) for the fourth consecutive day, trading around 1.6080 during European trading hours on Tuesday. Despite positive domestic economic data, such as Germany's HCOB Manufacturing PMI rising to 54.3 in August from July's 52.2, the Euro remained under pressure. The preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data for August came in at 3.3% year-over-year (YoY), as expected, and was slightly higher compared to the previous reading of 2.9%.

The core HICP for the same period stood at 2.4% YoY, lower than expectations and the prior release of 2.5%. However, core HICP increased by 0.2% on a monthly basis, after remaining flat in July. The Canadian Dollar (CAD) received strong backing from rising crude oil prices, as energy markets rallied due to recent military hostilities in the Middle East.

These tensions arose after US forces carried out strikes against Iranian rocket launchers on Larak Island, prompting Tehran to target military locations in the United Arab Emirates and Jordan. President Trump warned of potential military action targeting Kharg Island, Iran's central crude export terminal. Analysts noted that Brent crude prices maintained support above $85/84, with the benchmark challenging a multi-month descending trend line and probing a technically significant barrier.