U.S. Data Supports the Dollar While Tech Benchmarks Advance

The Euro traded slightly lower against the US Dollar early on Friday, with EUR/USD hovering near the 1.1600 level during early European trading as uncertainty surrounding a potential US-Iran peace agreement kept investors cautious. The pair was trading early on Friday around 1.1615 ahead of key economic data releases, including Germany’s IFO business sentiment surveys and the US Michigan Consumer Sentiment Index.

Market participants continued to assess developments in US-Iran ceasefire negotiations. Iranian officials indicated that the latest US proposal had helped narrow differences between the two sides. However, comments from Iran’s Supreme Leader regarding the country’s uranium stockpile, alongside ongoing disputes over transit tolls in the Strait of Hormuz, have complicated prospects for a near-term breakthrough.

Geopolitical concerns intensified after US President Donald Trump warned on Wednesday that military action could resume if Tehran fails to accept Washington’s terms. Persistent tensions in the Middle East have supported demand for safe-haven assets, lending strength to the US Dollar and weighing on EUR/USD.

Meanwhile, attention also remained on the European Central Bank’s policy outlook. According to Reuters, expectations for a June rate hike are now largely priced in, although policymakers are expected to avoid giving firm guidance on any follow-up move in July. The ECB left interest rates unchanged at its April meeting but acknowledged discussions around a possible hike, citing persistently elevated energy costs as a key inflation risk.

Gold prices edged lower on Friday as a stronger US Dollar and expectations of a prolonged hawkish stance from the Federal Reserve weighed on investor sentiment. Despite the decline, bullion remained above the key $4,500 level during the Asian trading session.

Investors have now largely ruled out any rate cuts in 2026 and are increasingly pricing in the possibility of at least one rate hike before the end of the year, amid concerns over rising energy costs and persistent inflation pressures.

Minutes from the Federal Open Market Committee’s April meeting reinforced the hawkish outlook, showing policymakers remain prepared to maintain restrictive monetary policy — or potentially tighten further — if inflation continues to exceed the Fed’s 2% target.

Higher US Treasury yields, driven by these expectations, have continued to support the Dollar while reducing the appeal of non-yielding assets such as Gold.

Geopolitical uncertainty surrounding US-Iran negotiations also remained in focus. Iranian officials acknowledged that differences between Washington and Tehran had narrowed, although no final agreement has been reached. Key disputes persist over Iran’s uranium enrichment program and control of the Strait of Hormuz, a critical global energy shipping route.

Ongoing geopolitical tensions, combined with a firm US Dollar and expectations of higher interest rates, continue to create downside pressure on Gold prices, with market sentiment currently favoring further weakness in the precious metal.

Oil prices rebounded during Asian trading on Friday after recent sharp declines, as investors continued to monitor developments surrounding a potential US-Iran peace agreement. Despite the recovery, crude benchmarks remained on track for significant weekly losses amid growing optimism that tensions between Washington and Tehran could ease.

Oil markets have come under pressure this week following positive signals from US-Iran negotiations. Earlier in the week, US President Donald Trump said he had postponed a planned military strike on Iran and pointed to progress in diplomatic talks, fueling hopes that the conflict could be approaching a resolution.

Trump later stated that the Iran conflict was entering its “final stages,” while Iranian officials confirmed they were reviewing the latest US proposal for a peace agreement. Reports on Thursday also suggested that both sides had reached a final draft of a deal, although neither Washington nor Tehran officially confirmed the claims.

Despite optimism surrounding negotiations, several unresolved issues continued to support oil prices.

Key disagreements also remain over Iran’s uranium enrichment program and the future control of the Strait of Hormuz. Trump reiterated on Thursday that Iran must not be allowed to retain the capability to develop nuclear weapons and warned that military action remained possible if negotiations failed to deliver meaningful progress.

Asian economies have been among the most affected by the supply disruptions, while the United States has increased crude exports to help offset shortages in international markets. Washington also extended a sanctions waiver on seaborne Russian oil earlier this week in an effort to stabilize global energy supplies.

US stocks closed higher on Thursday as renewed optimism surrounding a potential US-Iran peace agreement boosted investor sentiment and helped the US 30 secure its first record close since February.

Markets recovered from earlier losses after reports emerged that Washington and Tehran had reached a final draft of a peace agreement with mediation support from Pakistan. According to reports citing regional media outlets, the proposed deal includes an immediate ceasefire, guarantees for freedom of navigation through the Gulf and Strait of Hormuz, and further negotiations on unresolved issues within the coming week.

Investor sentiment had initially weakened after reports suggested Iran’s leadership intended to retain the country’s near weapons-grade uranium stockpile, a major sticking point in negotiations with the United States. However, Iranian officials later denied the claims, while the White House also dismissed the reports as inaccurate.

Economic data released Thursday painted a relatively resilient picture of the US economy. Initial jobless claims fell slightly below expectations, while S&P Global’s preliminary purchasing managers’ surveys showed steady business activity and stronger manufacturing momentum.

In corporate news, NVIDIA shares fell 1.8% despite the chipmaker reporting stronger-than-expected quarterly earnings and issuing upbeat revenue guidance. Investors remained cautious over the sustainability of the company’s rapid growth and its elevated valuation, even as demand for artificial intelligence infrastructure continued to surge.