Apple Earnings and Key U.S. Inflation and Growth Data in Focus

The EUR/USD pair edged lower to around 1.1680 during Thursday’s early European session, as the US Dollar gained support following the Federal Reserve’s decision to keep interest rates unchanged. Market focus now turns to the European Central Bank’s (ECB) policy decision later in the day.

At its April meeting on Wednesday, the Federal Reserve left the benchmark federal funds rate unchanged within the 3.50%–3.75% range. The decision was not unanimous, with four policymakers dissenting—three of whom opposed language in the official statement indicating a potential return to rate cuts. The 8–4 split marks the highest level of dissent since October 1992.

Fed Chair Jerome Powell stated that he intends to remain a member of the Board of Governors beyond the end of his term as chair. Meanwhile, Kevin Warsh, reportedly nominated by President Donald Trump, is seen as a leading candidate to succeed Powell.

Attention now shifts to the ECB, which is widely expected to maintain its key interest rates amid ongoing economic uncertainty. However, persistent inflationary pressures—partly driven by energy market volatility linked to geopolitical tensions involving Iran—have increased expectations of a possible rate hike in June.

Gold prices hovered above the $4,550 level during Thursday’s European session, posting modest intraday gains as the US Dollar paused following its post-Federal Reserve rally.

The US Dollar extended its upward momentum for a fourth consecutive session after the Federal Reserve maintained a relatively hawkish stance at its latest policy meeting. The central bank kept interest rates unchanged within the 3.50%–3.75% range, in line with expectations.

In his post-meeting remarks, Fed Chair Jerome Powell emphasized that disagreements centered on communication rather than the need for immediate policy tightening. Even so, market participants have scaled back expectations for rate cuts in 2026 and are now pricing in a modest probability of a rate hike by year-end.

Geopolitical developments are also supporting the US Dollar. Ongoing tensions between the United States and Iran, coupled with stalled diplomatic efforts, have boosted demand for the Greenback as a safe-haven currency. Reports indicate that US President Donald Trump has rejected Iran’s latest proposal to end the conflict, maintaining pressure on global energy markets, particularly through disruptions in the Strait of Hormuz.

This combination of factors is helping to cap further gains in gold, even as the metal attempts to recover from a recent monthly low.

Looking ahead, traders will monitor key US economic releases, including the advance estimate of first-quarter GDP and the Personal Consumption Expenditures (PCE) Price Index. In addition, upcoming policy decisions from the Bank of England and the European Central Bank are expected to inject further volatility into the markets.

Oil prices rallied sharply on Thursday, following reports that the United States is considering potential military action against Iran. The development has heightened concerns over further supply disruptions in an already strained Middle East energy market.

Market sentiment was driven by a report indicating that US President Donald Trump is set to receive a briefing on potential military strikes against Iran, aimed at breaking the current deadlock in negotiations over its nuclear programme.

The conflict has already severely disrupted global energy flows. Since late February, military escalation between the US, Israel, and Iran has led to significant supply constraints, including the near closure of the Strait of Hormuz—a critical chokepoint for global oil shipments. Although a ceasefire has paused direct fighting, the US has imposed a blockade on Iranian ports, prolonging uncertainty in the region.

Negotiations to resolve the crisis remain stalled. Washington is pushing for discussions on Iran’s nuclear ambitions, while Tehran is demanding greater control over the Strait of Hormuz and compensation for war-related damages.

The producer alliance is expected to approve a modest increase in output at its upcoming meeting, though this may do little to offset supply losses. The recent exit of the United Arab Emirates from OPEC is also seen as a potential challenge to the group’s ability to manage production levels effectively, although its immediate market impact is likely to be limited.

With supply constraints intensifying, analysts are increasingly pointing to demand destruction as a key balancing mechanism. According to estimates, elevated prices could reduce global oil demand by around 1.6 million barrels per day, though this would still fall short of fully offsetting the current supply deficit.

US stock index futures traded mixed on Wednesday evening after Wall Street closed largely unchanged, as investors assessed the Federal Reserve’s latest policy decision, rising oil prices, and a fresh round of major corporate earnings.

The Federal Reserve kept interest rates unchanged for a third consecutive meeting, in line with market expectations, though the decision revealed growing divisions among policymakers.

In what is expected to be his final meeting as chair, Jerome Powell warned that inflationary pressures—particularly those linked to energy—have yet to peak, reinforcing a cautious policy stance. He also indicated that he plans to remain on the Fed’s Board of Governors after stepping down as chair.

Geopolitical tensions escalated following reports that Donald Trump is considering a prolonged blockade of Iran, raising fears over restricted flows through the Strait of Hormuz—a critical artery for global energy supplies. Additional reports suggest the US is working with allies on measures to safeguard shipping routes, even as diplomatic efforts remain stalled.

Post-market earnings from major technology companies drove after-hours trading activity, with results presenting a mixed picture across the sector. Microsoft shares were little changed after the company reported stronger-than-expected results, supported by robust demand for cloud and artificial intelligence services. Meanwhile, Meta Platforms declined sharply after signaling lower capital expenditure plans. Amazon rose following an earnings beat, while Alphabet surged on resilient advertising performance. Looking ahead, investors will monitor additional earnings releases from Caterpillar, Merck, and Eli Lilly, with Apple scheduled to report later in the day.

Market participants will also focus on upcoming US economic data, including the advance estimate of first-quarter GDP and the Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred measure of inflation—which could provide further direction for monetary policy expectations.