ECB Interest Rate Decision, U.S. Jobless Claims, Philly Fed Manufacturing

The EUR/USD pair rose on Wednesday ending the session 0.90% higher. Investor sentiment is subdued while awaiting developments on potential trade agreements from the U.S. administration, as well as the European Central Bank’s (ECB) policy decision later in the day.

Federal Reserve Chair Jerome Powell, speaking on Wednesday, highlighted growing concerns around U.S. trade tensions, warning that tariffs could complicate the central bank’s dual mandate of stable prices and maximum employment. Powell noted signs of a cooling U.S. economy, citing modest consumer spending, a front-loading of imports to sidestep tariffs, and weakening business sentiment—factors that could weigh on GDP growth projections.

In the Eurozone, the ECB is widely anticipated to lower interest rates by 25 basis points at today’s meeting—its third cut this year and the sixth in a row amid persistent global trade uncertainty and sluggish regional growth.

With monetary policy in the spotlight on both sides of the Atlantic, traders will be closely watching for guidance from central banks as they navigate a complex global landscape.

Gold prices surged once again on Wednesday to a new all-time high as escalating U.S.–China trade tensions drove investors toward safe-haven assets.

The ongoing trade dispute intensified after U.S. President Donald Trump announced a probe into rare earth imports—an action widely interpreted as a step toward imposing new tariffs. This development further strained relations with China and deepened market uncertainty, undermining risk appetite across asset classes.

Adding to the market’s complexity, Federal Reserve Chair Jerome Powell struck a hawkish tone during remarks at the Economic Club of Chicago, cooling expectations of near-term rate cuts. Powell emphasized the Fed’s commitment to controlling inflation amid tariff-driven price pressures.

On the data front, U.S. Retail Sales came in stronger than expected, signaling consumer resilience. However, Industrial Production figures revealed continued weakness in the manufacturing sector, underscoring a mixed economic picture.

Oil prices surged nearly 2% on Wednesday, reaching their highest levels in two weeks, as concerns over global supply were reignited by fresh U.S. sanctions targeting Chinese importers of Iranian crude. The geopolitical move added upward pressure to a market already sensitive to supply-side disruptions.

The rally followed Washington’s announcement of new sanctions aimed at curbing Iran’s oil exports, with measures specifically targeting a Chinese "teapot refinery." The sanctions reflect the Trump administration’s ongoing strategy to exert maximum pressure on Tehran, even as nuclear negotiations resume this month.

Ahead of the next round of talks in Rome, Iran’s Foreign Minister Abbas Araqchi asserted that Tehran’s right to enrich uranium remains non-negotiable, further complicating diplomatic progress.

In the U.S., the Energy Information Administration (EIA) reported a modest rise in crude inventories—up 515,000 barrels to 442.9 million for the week ending April 11. While the increase was slightly above analyst forecasts, it was offset by declines in gasoline and distillate stockpiles, helping sustain bullish momentum in the market.

U.S. main indexes ended the session lower on Wednesday driven by concerns over chipmaker earnings and renewed trade tensions. Federal Reserve Chair Jerome Powell’s hawkish tone on interest rates and inflation risks also weighed on sentiment.

Equities took a sharp hit during Wednesday’s regular trading session, led by a nearly 7% plunge in NVIDIA Corp.. The chipmaker warned of a $5.5 billion revenue hit in the first quarter due to new U.S. export restrictions targeting its H20 AI chip, which was specifically designed for the Chinese market.

Under updated U.S. trade regulations, the H20 now requires an export license—a requirement that the Biden administration has indicated will remain in place indefinitely.

Wall Street analysts warned that Nvidia’s disclosure could spark more volatility in the semiconductor space, particularly as trade relations between the U.S. and China remain tense.

Adding to investor caution, Fed Chair Jerome Powell stated that the central bank is not inclined to reduce interest rates anytime soon.

With the Fed on hold, inflation sticky, and trade uncertainty clouding the outlook, markets may remain volatile in the sessions ahead—particularly as earnings season rolls on and geopolitical developments continue to unfold.