Forex Today: Investors look for direction as US-Iran negotiations progress

Market Overview for Thursday, April 16

As Thursday's European trading session begins, major currency pairs remain largely unchanged while investors look for direction regarding the ongoing discussions between the United States and Iran. Later today, attention will turn to the US economic docket, which features the release of weekly Initial Jobless Claims and the Federal Reserve’s March Industrial Production report.

On Wednesday, US President Donald Trump told Fox Business Network that a resolution to the conflict with Iran could be imminent, mentioning that the Strait of Hormuz is reopening. At the same time, various media outlets reported that the US was considering a two-week extension to the ceasefire. However, White House Press Secretary Karoline Leavitt refuted these claims, emphasizing that peace negotiations are still "ongoing" and "productive." Iranian officials are expected to meet with Pakistan’s military chief in Tehran today to discuss recent communications with the US, and a second round of US-Iran talks may be on the horizon.

US equity markets ended Wednesday with mixed results. The Dow Jones Industrial Average slipped slightly, while the S&P 500 Index advanced by 0.8%. Early Thursday, US stock index futures are up between 0.1% and 0.4%. Meanwhile, the US Dollar Index (USD) continues to trade within a tight range near 98.00 after closing the previous day nearly flat.

Key Economic Data Releases

• Australia’s latest figures showed the Unemployment Rate held steady at 4.3% in March, matching expectations. Employment Change came in at +17.9K, just below the forecast of +20K. The AUD/USD pair extended its weekly rally, reaching its highest point since June 2022, just under 0.7200.
• China’s economy grew by 5% year-on-year in the first quarter, according to the National Bureau of Statistics. This result surpassed both the previous quarter’s 4.5% growth and analysts’ projections of 4.8%.
• The UK’s Office for National Statistics (ONS) reported a 0.5% monthly increase in GDP for February, significantly outpacing the expected 0.1%. Industrial Production also rose by 0.5%, while Manufacturing Production slipped by 0.1%. The GBP/USD pair showed little movement, remaining slightly above 1.3550.

The EUR/USD pair continues to consolidate near 1.1800 after a flat close on Wednesday. The European Central Bank (ECB) is set to release the minutes from its March policy meeting later today.

USD/JPY has rebounded toward 159.00 after dipping below 158.30 earlier. Japan’s Finance Minister Satsuki Katayama reported having discussions with US Treasury Secretary Scott Bessent about currency exchange rates, agreeing to maintain close communication. Katayama also noted that many central bankers are adopting a cautious approach, as raising interest rates could pose risks to economic growth.

Gold (XAU/USD) fell by approximately 1% on Wednesday, ending a two-day winning streak. However, XAU/USD has stabilized and is trading positively above $4,800 early Thursday.