Weekly Preview: Nvidia Earnings, FOMC Meeting Minutes, U.K. CPI

The euro edged lower toward the 1.1600 level against the US dollar during Monday’s early Asian trading session, with EUR/USD slipping to around 1.1615 as escalating tensions between the United States and Iran weighed on investor sentiment and boosted demand for safe-haven assets.

Market participants remain cautious after negotiations aimed at ending the conflict appeared to stall. Iranian media reported that Washington had not offered meaningful concessions in response to Tehran’s latest proposals. According to the Fars news agency, the US outlined several key conditions for a potential agreement, including the transfer of uranium linked to Iran’s nuclear program to the United States, limited access to frozen Iranian assets, and no reparations payments to Tehran.

US President Donald Trump further intensified pressure on Sunday, warning Iran to “get moving” or risk facing additional consequences. The ongoing geopolitical uncertainty has continued to support the US dollar, creating downward pressure on the euro.

Investors are also looking ahead to preliminary Purchasing Managers’ Index (PMI) data from both the Eurozone and the United States, scheduled for release later this week, which could provide fresh direction for currency markets.

Meanwhile, expectations of tighter monetary policy from the European Central Bank (ECB) may help limit the euro’s downside. Several ECB policymakers have recently signaled support for further rate increases to address persistent inflation concerns. A Reuters survey showed that roughly 85% of economists expect the ECB to raise its deposit rate by 25 basis points to 2.25% in June, compared with just over half who held that view before the bank’s April meeting.

Gold prices attempted a modest rebound on Monday after falling to their lowest level since late March, though gains remained limited as a stronger US dollar and rising geopolitical tensions continued to weigh on the precious metal.

Investor demand for the US dollar stayed firm as concerns over escalating tensions in the Middle East supported safe-haven flows. Recent developments added to market anxiety after a drone strike reportedly triggered a fire at the Barakah Nuclear Power Plant in the United Arab Emirates. Saudi Arabia also confirmed intercepting three drones launched from Iraq and warned it was prepared to take operational measures against any threats to its sovereignty and security.

At the same time, US President Donald Trump increased pressure on Iran, urging Tehran to move quickly toward a deal or face serious consequences. In a statement posted on Truth Social, Trump said that “the clock is ticking” and warned that there could soon be “nothing left” if negotiations fail to progress.

The latest geopolitical tensions have dampened hopes for a breakthrough in US-Iran talks, strengthening the dollar’s appeal as a reserve currency. Rising crude oil prices have also intensified inflation concerns after reports of disruptions linked to Iranian shipping routes and the Strait of Hormuz pushed oil to a two-week high.

Investors are now focused on the upcoming release of the Federal Open Market Committee (FOMC) meeting minutes on Wednesday, which may offer fresh insight into the Fed’s policy outlook. Markets will also monitor preliminary global PMI data and further geopolitical developments for signs of increased volatility.

Oil prices climbed sharply in Asian trading on Monday as geopolitical tensions between the United States and Iran continued to intensify following a drone strike near a nuclear facility in the United Arab Emirates.

The gains were driven by mounting concerns over potential supply disruptions in the Middle East and the continued closure of the Strait of Hormuz.

Market sentiment remained tense after drone strikes sparked a fire near the Barakah nuclear power plant in the UAE on Sunday. Although authorities reported no direct damage to the main facility, the UAE described the incident as a “dangerous escalation” and suggested Iran or allied proxy groups may have been responsible.

The closure of the Strait of Hormuz, effectively blocked by Iran since late February, has significantly disrupted global energy markets. Analysts estimate that nearly 20% of global oil supplies normally pass through the strategic waterway, and shipping activity through the route remains well below pre-conflict levels. The supply concerns have continued to provide strong support for crude prices.

Additional pressure on global oil markets emerged after the United States allowed a sanctions waiver for Russian seaborne oil exports to expire over the weekend. The waiver had previously enabled several countries to continue purchasing Russian crude despite sanctions. Its expiration is expected to force major importers, particularly India, to seek alternative suppliers, tightening global oil availability further.

With geopolitical risks remaining elevated and concerns over restricted supply intensifying, analysts expect oil markets to remain volatile in the near term.

US stocks closed sharply lower on Friday, capping a volatile week on Wall Street as investors reacted to a global bond market sell-off, rising oil prices, and lingering uncertainty surrounding geopolitical tensions in the Middle East.

The decline came after a strong rally that had pushed both the US 500 and US Tech 100 to consecutive record highs earlier in the week, prompting many investors to lock in profits.

Investor sentiment weakened as bond yields surged globally amid growing concerns that the Middle East conflict could fuel a renewed wave of inflation. Rising oil prices and expectations of tighter monetary policy added pressure to equity markets.

Geopolitical uncertainty also remained in focus following US President Donald Trump’s visit to China, which ended without major breakthroughs on trade or foreign policy issues.

Recent inflation data in the United States has also reinforced expectations of tighter monetary policy. Both consumer and producer price reports for April showed the impact of rising energy prices, increasing speculation that the Federal Reserve could be forced to consider additional interest rate hikes.

Among individual stocks, AI chipmaker Cerebras fell more than 10% a day after a strong Nasdaq debut, while Applied Materials slipped despite reporting better-than-expected quarterly results. In contrast, software company Figma surged over 13% after issuing strong revenue guidance driven by demand for its artificial intelligence design tools.