Forex Today: Focus shifts to US-Iran negotiations, key US economic data in spotlight

Market Overview for Thursday, February 26

As Thursday unfolds, investors are treading carefully with attention turning to the US-Iran nuclear discussions taking place in Geneva. In Europe, markets are awaiting the release of February's business and consumer sentiment figures. Later, the US Department of Labor will announce the latest Initial Jobless Claims, while the Kansas City branch of the Federal Reserve is set to publish its Manufacturing Activity Index for February.

On Wednesday, major US stock indices continued their upward trend for the week, with the technology-focused Nasdaq Composite leading the advance. Meanwhile, the US Dollar (USD) faced challenges, ending the day lower against other major currencies. By Thursday morning in Europe, the USD remains stable above 97.50, while US stock index futures are down approximately 0.2%.

US Secretary of State Marco Rubio commented earlier that the Geneva talks will prioritize Iran’s nuclear program, highlighting concerns over Iran’s reluctance to address ballistic missile issues. After two days of modest declines, West Texas Intermediate (WTI) crude oil is trading within a narrow band near $65.50.

In Japan, Bank of Japan (BoJ) Governor Kazuo Ueda reaffirmed on Thursday that the central bank will likely continue to raise interest rates if their economic and inflation projections become more certain. BoJ Board Member Hajime Takata also remarked on the challenges of determining the ideal pace and endpoint for rate hikes. After two days of gains, USD/JPY is slightly lower in early European trading but remains just above 156.00.

Currency and Commodities Update

• EUR/USD is consolidating above 1.1800 in early European hours, following a 0.3% rise on Wednesday.
• GBP/USD advanced by 0.5% on Wednesday and continued to climb during Thursday’s Asian session. After reaching a new weekly peak above 1.3570, the pair has since stabilized near 1.3550.
• After a steep drop on Tuesday, Gold made slight gains on Wednesday. XAU/USD is holding steady in Europe, moving toward $5,200.
• AUD/USD is maintaining levels above 0.7100 after nearly a 1% increase on Wednesday. Reserve Bank of Australia (RBA) Governor Michele Bullock commented that the Australian economy is performing well, but emphasized the need for patience in policy decisions.