BoE Interest Rate, U.S. Jobless New Claims, EIA Natural Gas Report

The EUR/USD pair remained rangebound around the 1.1300 level on Wednesday, showing little reaction to the Federal Reserve’s latest policy decision. As expected, the Fed held interest rates steady, but the accompanying commentary from Chair Jerome Powell leaned heavily on caution, keeping markets in a holding pattern.

While the Fed acknowledged that the U.S. labor market and economic activity remain solid, Powell flagged rising concerns over trade tensions and their potential drag on economic momentum. In particular, uncertainty stemming from U.S. tariff policy has prompted the Fed to tread carefully.

Initially, EUR/USD saw a modest uptick as traders interpreted the Fed’s tone as dovish, pricing in a greater likelihood of rate cuts. However, that optimism was quickly tempered during Powell’s press conference, where he emphasized that persistent trade-related uncertainty could jeopardize the Fed’s ability to meet its dual mandate of full employment and stable inflation.

Despite the drag on consumer and business confidence caused by tariff concerns, Powell noted that hard economic data has yet to show significant deterioration, complicating the case for immediate monetary easing.

Bitcoin advanced sharply early today, edging closer to the psychologically significant $100,000 mark as market sentiment improved on the back of renewed optimism around global trade negotiations.

Thursday’s rally in Bitcoin was fueled by a broader upswing in risk assets after U.S. President Donald Trump signaled the announcement of a “major” trade deal. According to reports from The New York Times, the deal is expected to be with the United Kingdom—a nation not currently subject to reciprocal U.S. tariffs but running a trade deficit with Washington.

Trump described the agreement as the “first of many,” raising hopes that the U.S. could secure additional trade deals with other key partners such as Japan and the European Union.

In parallel with the trade-related optimism, Bitcoin has also benefited from steady capital inflows into spot Bitcoin exchange-traded funds (ETFs), reflecting growing institutional interest in the asset class.

Investors now turn their focus to the key $100,000 resistance level, a psychological threshold last reached nearly three months ago. Breaking above it could reinforce bullish momentum and attract additional inflows from both retail and institutional players.

Crude oil prices declined sharply on Wednesday, shedding more than $1 per barrel, as scepticism over progress in U.S.-China trade talks tempered market optimism. Meanwhile, renewed hopes for a potential Iran-U.S. nuclear deal eased concerns over near-term supply constraints.

Markets were initially buoyed by news that U.S. and Chinese officials are set to meet in Switzerland, a move seen as a potential first step toward easing trade tensions that have weighed on the global economic outlook. However, expectations for a meaningful breakthrough remained muted.

At the same time, oil markets responded to comments from U.S. Vice President JD Vance, who described recent discussions with Iran as “so far, so good.” He indicated a potential deal could be on the table that would reintegrate Iran into global markets while curbing its nuclear ambitions.

Additional downward pressure came from weekly U.S. Energy Information Administration (EIA) data, which showed gasoline inventories unexpectedly rose, raising demand concerns ahead of the summer driving season. This marks a reversal after several weeks of stronger refinery utilization.

Beyond demand-side concerns, geopolitical tensions continue to play a role in market volatility.

U.S. equities ended lower on Wednesday, with the US 500 managing to trim some of the earlier losses as a rebound in semiconductor stocks offset losses in tech heavyweight Alphabet and renewed concerns over the Federal Reserve's hawkish tone.

As expected, the Federal Reserve kept interest rates unchanged, though its post-meeting statement highlighted increased risks to both inflation and employment. Policymakers maintained a cautious tone, signaling a continued wait-and-see stance as the economic impact of elevated tariffs remains uncertain.

Adding to the cautious sentiment, President Donald Trump stated he is not open to reducing the 145% tariffs on Chinese imports, dimming hopes for near-term progress in the ongoing U.S.-China trade dispute.

The comments come ahead of planned trade discussions in Switzerland this week, where Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will meet Chinese Vice Premier He Lifeng, Beijing’s lead official on U.S.-China relations.

Alphabet Inc. fell over 7%, dragging the tech sector lower, after Apple unveiled plans to incorporate AI-powered search capabilities into its browser ecosystem. The announcement raised concerns over Alphabet’s lucrative default search deal with Apple, a major revenue driver.

However, strength in chipmakers helped offset the tech slide. NVIDIA Corp. rallied on reports that the Trump administration may roll back Biden-era restrictions on AI chip exports, potentially reopening trade opportunities in China and boosting semiconductor demand.