Euro strengthens against Canadian Dollar as German HICP inflation accelerates, oil eases

• German HICP jumped to a 2024 peak of 3.3% in September, driven by rising energy costs.
• The Euro gained ground against the Canadian Dollar, which faced pressure from falling global crude oil prices.
• Oil prices slid after US sanction waivers on Russian diesel exports promised to ease tight global markets.

EUR/CAD recovers its recent losses from the previous day, trading around 1.5950 during European hours on Tuesday. The currency cross appreciates as the Euro (EUR) gains support following the release of Harmonized Index of Consumer Prices (HICP) inflation data from Germany.

Germany’s Harmonized Index of Consumer Prices rose to 3.3% year-on-year in September, meeting expectations and marking a clear acceleration from 2.9% in August 2026 and 2.8% in July 2026. Destatis President Ruth Brand noted that inflation crossed the 3% mark to reach its highest level since December 2023, driven primarily by surging energy costs, particularly heating oil and motor fuels at filling stations. On a month-over-month basis, total consumer prices increased by 0.6%.

Moreover, the EUR/CAD cross currency pair remained firm, supported by weakness in the commodity-linked Canadian Dollar (CAD) as global crude oil prices declined. Oil markets faced downward pressure as traders weighed potential new Russian fuel supplies against ongoing geopolitical risks.

The drop in crude oil followed an announcement by US President Donald Trump that Russia had agreed to supply diesel to global markets. In response, the US administration temporarily eased sanctions on Russian fuel, measures originally implemented to limit Moscow's revenue during its war in Ukraine, in an effort to relieve tight global market conditions and curb rising energy prices.

Brent shrugs off ceasefire headlines as supply risks keep prices elevated

Strategists at ING observe that the recent pullback in crude following President Trump’s announcement of an energy ceasefire between Russia and Ukraine proved fleeting, with “the weakness in the oil market…short-lived.” They add that “that goes, too, for the US-Russia diesel export deal,” as traders quickly refocused on broader supply risks. Reflecting this resilience, ING notes that “ICE Brent settled 1.8% higher, just shy of $107/bbl yesterday — the highest close since mid-September,” underscoring that Middle East and Persian Gulf supply concerns continue to dominate price action despite the ceasefire headlines.