ECB Decision, U.S. Jobless Claims and Earnings in Focus

EUR/USD continues to move higher, trading near 1.1430 as investors await the European Central Bank’s policy decision and Christine Lagarde’s guidance on the future path of interest rates.

The ECB is widely expected to keep its deposit rate unchanged at 2.25%, leaving markets focused on Lagarde’s press conference for signals on monetary policy direction.

Meanwhile, the US Dollar remains under pressure as traders balance renewed inflation concerns from rising energy prices against signs of a softer US economic outlook. Expectations that the Federal Reserve will maintain its current policy stance have also weighed on the Greenback, while uncertainty surrounding future Fed guidance adds to market caution.

However, Dollar losses remain limited as geopolitical risks continue to support safe-haven demand. Tensions in the Middle East intensified after US President Donald Trump warned of potential strikes on Iranian infrastructure if Tehran targets ships passing through the Strait of Hormuz, prompting Iran to threaten retaliation against US-linked energy interests in the region.

Adding to concerns, Iran-backed Houthi militants carried out missile and drone attacks on two Saudi oil tankers in the Red Sea, marking the first reported direct strikes on tankers in the waterway and raising fears over the security of a key alternative route for Saudi crude exports.

Gold remains supported above the $4,100 level during Thursday’s Asian session, struggling to extend losses after retreating slightly from a more than two-week high.

Rising crude oil prices, driven by escalating tensions between the US and Iran, have intensified inflation concerns and boosted expectations that the Federal Reserve could keep a more hawkish stance. Higher rate hike expectations have pushed US Treasury yields to multi-month highs, creating headwinds for the non-yielding precious metal.

Geopolitical risks continue to provide underlying support, although higher energy prices and rising Treasury yields remain a key headwind for the non-yielding metal.The developments have increased concerns over potential disruptions to global energy supplies, particularly amid reduced shipping activity through the Strait of Hormuz, supporting further gains in oil prices.

Markets are increasingly pricing in the possibility of higher US interest rates, with CME Group’s FedWatch Tool showing traders assigning more than a 90% probability of a Fed rate hike by year-end. The prospect of tighter monetary policy has supported US bond yields, with the 10-year Treasury yield holding near a two-month high.

However, continued weakness in the US Dollar has provided some relief for Gold, limiting downside pressure and helping the metal maintain its recent bullish momentum. Investors remain cautious before confirming whether the current uptrend has lost strength.

Attention now turns to the release of weekly US Initial Jobless Claims, the European Central Bank’s policy decision, and further developments surrounding Middle East tensions, which are likely to drive short-term moves in Gold prices.

Oil prices climbed early on Thursday, reaching their highest levels in over six weeks as escalating tensions between the US and Iran, along with attacks on oil tankers in the Red Sea, intensified concerns over global energy supplies..

The latest gains came after the US military carried out a 12th consecutive night of strikes against Iran, following President Donald Trump’s warning that Washington would target Iranian infrastructure if Tehran attacks ships passing through the Strait of Hormuz.

Adding to supply concerns, Iran-backed Houthi militants announced a naval blockade targeting Saudi Arabia and threatened to attack vessels carrying Saudi crude through the Bab el-Mandeb Strait. The group claimed responsibility for strikes on two Saudi oil tankers in the Red Sea, with maritime security reports indicating that one vessel, the Saudi-flagged tanker Encelia, was hit.

The potential disruption of key shipping routes has heightened fears of broader impacts on global energy markets, with the Strait of Hormuz and the Red Sea serving as critical pathways for oil exports.

Despite geopolitical risks supporting prices, US inventory data provided some offsetting pressure. The Energy Information Administration reported that US crude inventories increased by 2 million barrels last week, compared with analysts’ expectations for a 1.1 million-barrel

US stocks closed slightly lower on Wednesday as investors remained cautious ahead of major technology earnings, while concerns over the cost of artificial intelligence investments weighed on sentiment. The main focus remained on the earnings season, with investors looking for signs on whether heavy AI-related spending by major technology companies can translate into stronger future growth.

Alphabet shares declined in after-hours trading after the Google parent reported weaker-than-expected adjusted earnings per share and raised its 2026 capital expenditure forecast. The company increased its spending plans by $15 billion to a range of $195 billion-$205 billion, citing strong demand for AI and cloud services.

While Google Cloud growth exceeded expectations, Alphabet’s aggressive investment strategy raised concerns among investors after the company reported negative free cash flow for the first time, reflecting the significant costs associated with expanding AI infrastructure. The results added to broader market concerns that the AI boom may require much larger investments before delivering meaningful returns, contributing to recent weakness across technology and semiconductor stocks.

Tesla shares also moved lower in after-hours trading after the electric vehicle maker reported weaker than expected quarterly earnings. The company’s bottom-line results were missing forecasts, while cash flow turned negative amid increased spending on AI, robotics, and autonomous driving initiatives. Although Tesla’s core vehicle sales improved during the quarter, margins remained under pressure, highlighting challenges as the company continues its transition from a traditional EV manufacturer toward an AI and robotics-focused business.

Elsewhere, Super Micro Computer surged nearly 20% after issuing stronger margin guidance and reporting significant new orders, while Nvidia gained as optimism around AI demand remained intact. Philip Morris advanced following better-than-expected results, whereas GE Vernova declined after missing earnings expectations.

Investors now await further corporate results for additional clues on technology spending, AI investment trends, and the broader outlook for US equities.