On Thursday, the Canadian Dollar (CAD) outperformed most major currencies, except the US Dollar (USD), as oil prices surged following US President Donald Trump’s address warning of intensified attacks against Iran in the next two to three weeks [1]. Trump stated that Washington would 'hit Iran extremely hard over the next two to three weeks, and bring them back to the stone ages,' reviving fears of further damage to Gulf energy infrastructure and prolonged oil supply disruptions [1]. As a result, WTI Oil prices rose 8% to around $102.00, favoring currencies from net oil exporters like Canada [1].
The CAD was strongest against the Australian Dollar, with the heat map showing notable percentage changes: CAD/AUD up 0.53%, CAD/EUR up 0.31%, CAD/GBP up 0.51%, and CAD/JPY up 0.17% [1]. Meanwhile, the US Dollar Index (DXY) traded 0.6% higher near 100.15, reflecting increased demand for safe-haven assets amid geopolitical tensions [1]. French President Emmanuel Macron commented on the situation, stating, 'It's unrealistic to free the Strait of Hormuz by military means,' highlighting global concerns about the Iranian military's dominance of the passage that accounts for nearly 20% of global oil supply [1].
In parallel, the Euro (EUR) declined more than 0.5% against the USD, extending its reversal from Wednesday’s highs near 1.1625 to session lows just below 1.1520 [2]. The lack of a specific deadline for the Iran conflict in Trump’s televised message, coupled with his call for allies to 'build up the courage' to secure the Strait of Hormuz, led to fading hopes of a swift resolution and reactivated risk-off trades [2]. This shift supported the USD and boosted oil prices, negatively impacting crude-importing Eurozone economies [2].
Technical analysis indicates a bearish trend for EUR/USD, with the MACD about to cross below the signal line and the RSI below 50, suggesting fading upside momentum [2]. The Euro faces increased pressure towards the March 19 and 31 lows around 1.1440, with further downside targets at 1.1411 and 1.1327 [2]. Immediate resistance is seen at 1.1606, with further resistance at 1.1630 and 1.1640 [2].
CONCLUSION
The surge in oil prices and heightened geopolitical tensions following President Trump’s threats against Iran have strengthened the Canadian Dollar and the US Dollar, while weighing heavily on the Euro. Market sentiment is risk-off, with safe-haven assets favored and crude-importing economies under pressure. The situation remains fluid, with technical indicators suggesting further downside for the Euro if tensions persist.