Dollar and Oil Steady as Iran Nuclear Talks Show Progress

The EUR/USD pair advanced toward the 1.1800 mark during Friday’s late Asian session, as investors positioned ahead of Germany’s preliminary February inflation figures and the upcoming US Producer Price Index (PPI) release.

Germany’s flash Harmonized Index of Consumer Prices (HICP) is projected to rise by 0.5% month-on-month, reversing January’s 0.1% decline. On an annual basis, inflation is expected to hold steady at 2.1%.

Despite the anticipated uptick, the data is unlikely to significantly alter expectations for Eurozone monetary policy. European Central Bank President Christine Lagarde told the Committee on Economic and Monetary Affairs (ECON) of the European Parliament on Thursday that she remains confident inflation will stabilize around the Bank’s 2% target in the near term.

Addressing the policy outlook, Lagarde reiterated that interest rate decisions will depend on the evolving inflation trajectory and associated risks. She emphasized that the ECB will continue to adopt a data-dependent, meeting-by-meeting approach when determining the appropriate monetary stance.

Meanwhile, the US Dollar softened slightly ahead of January’s PPI report, due at 13:30 GMT.  Market participants will scrutinize the producer inflation data for further signals on price pressures in the US economy. The outcome could carry meaningful implications for the policy outlook of the Federal Reserve, as several officials have recently signaled a preference to keep interest rates steady in the near term amid persistent upside inflation risks.

Gold prices remained confined to a narrow range below the $5,200 level during Friday’s Asian session, struggling to extend the modest rebound seen over the previous two days.

Ongoing geopolitical tensions continue to provide underlying support for the precious metal. A significant US naval and air deployment in the Middle East has kept markets cautious, particularly after US President Donald Trump reiterated during his State of the Union address the possibility of military action against Iran. Earlier in the week, he also stated that he would not allow Iran to obtain a nuclear weapon, reinforcing risk-off sentiment.

Trade-related uncertainties are adding to the supportive backdrop for bullion. The United States has implemented a 10% tariff on all non-exempt goods, following a Supreme Court ruling against broader tariff measures. Although Trump had previously floated a 15% rate, a White House official indicated that efforts are underway to raise levies to that level, heightening fears of retaliatory actions and potential disruptions to global supply chains. Persistent uncertainty over US trade policy continues to bolster demand for traditional safe-haven assets such as Gold.

Looking ahead, market attention turns to the release of the US Producer Price Index (PPI) later in the North American session. In addition, speeches from key FOMC members may influence US Dollar demand and provide fresh directional cues for Gold ahead of the weekend.

Oil prices edged lower in Asian trading on Friday after the United States and Iran agreed to extend discussions over Tehran’s nuclear program. Markets also assessed the impact of rising Venezuelan crude exports on global supply.

Both benchmarks remain slightly lower for February overall, as supply risks tied to geopolitical tensions have been offset by signs of increasing global output and concerns over softer demand.

Negotiations between Washington and Tehran concluded on Thursday without a formal agreement. However, both sides indicated that talks would resume soon, with technical-level discussions scheduled for next week in Vienna, according to mediator Oman.

Heightened tensions surrounding Iran were a key driver of oil prices in February, particularly after the US expanded its military presence in the Middle East and warned of potential action if Tehran refused to compromise.

Meanwhile, oil sales under a recent supply agreement between the US and Venezuela are projected to reach $2 billion by the end of February, US officials said. The development follows Washington’s move earlier this year to take control of Venezuela’s oil sector after the capture of President Nicolás Maduro by US forces.

Since then, Venezuelan production has accelerated, with global trading firms Vitol and Trafigura marketing much of the country’s crude. Buyers across Asia and Europe — including major consumer India — are expected to receive shipments in the coming weeks.

Venezuela’s renewed presence in international markets marks a notable increase in global supply, reinforcing expectations of a potential surplus.

US equities closed lower on Thursday, pressured by a sharp decline in Nvidia shares despite the chipmaker delivering better-than-expected quarterly results.

The pullback followed gains in the previous session, when investor sentiment had improved on renewed optimism surrounding artificial intelligence (AI), the latest swing in what has been a volatile narrative around the fast-growing technology theme.

Nvidia reported quarterly revenue and profit that exceeded market expectations for the three months ended January. The company also issued stronger-than-anticipated guidance for the current quarter, buoyed by sustained AI-driven demand for its advanced chips.

Industry participants pointed to continued robust investment across the AI ecosystem, including spending by tech giants such as Alphabet and Meta Platforms, as evidence that demand for AI infrastructure remains strong.

However, investor enthusiasm was tempered by concerns over capital returns. Market participants noted that while Nvidia generated roughly $35 billion in cash during the fourth quarter, it returned a smaller portion to shareholders compared with the same period last year. The stock closed 5.5% lower, dragging down other semiconductor heavyweights including Broadcom and ASML.

In other earnings-related moves, shares of Salesforce rose 4%. The cloud-based software provider issued a fiscal 2027 revenue outlook that fell short of Wall Street estimates, signaling that corporate spending on business software may be moderating amid broader economic uncertainty. Despite the softer long-term forecast, investors appeared encouraged by the company’s overall performance and positioning.