Ripple's XRP showed signs of a modest recovery, trading near $1.10 during Thursday's session as uncertainty continued to weigh on the cryptocurrency market following renewed tensions in the Middle East.

US-Iran tensions weigh on crypto market despite improving derivatives demand

Geopolitical pressures intensified after the US military announced late Wednesday that it had carried out strikes targeting 90 locations along Iran's coastline.

Iran's Revolutionary Guard responded by launching attacks against US military bases in Kuwait and Bahrain.

Despite the escalation, Qatar's prime minister called on both Iran and the United States to continue diplomatic dialogue, according to Reuters.

Retail interest improves modestly while institutional investors remain cautious

XRP continued to attract limited retail demand in the derivatives market, with CoinGlass data showing that open interest in perpetual futures remained stable at around 2.14 billion XRP on Thursday.

The data also showed that open interest had increased from 2.09 billion XRP recorded on Tuesday, a trend that could support the current recovery if retail demand continues to strengthen.

Institutional investors, however, remain more cautious. That was reflected in spot XRP ETF data, which showed net outflows of approximately $7 billion on Wednesday following subdued activity on Monday and Tuesday.

The New Zealand dollar, known as the kiwi, rose on Thursday to its highest level in more than two weeks after strong manufacturing data reinforced investor expectations that New Zealand will continue tightening monetary policy.

Strong industrial data and hawkish central bank stance support the kiwi

The data showed that New Zealand's manufacturing sector expanded last month at its fastest pace in nearly five years, while Reserve Bank of New Zealand Governor Anna Breman said the economy was growing more strongly than expected after the central bank raised interest rates this week.

In trading, NZD/USD hovered near 0.5730, up about 0.56%, as the New Zealand currency continued to draw support from the RBNZ's decision, which was more hawkish than markets had expected.

As widely expected, the central bank raised the official cash rate by 25 basis points to 2.5% at its July meeting. More importantly for markets, however, it signaled that further withdrawal of monetary stimulus may be necessary to ensure inflation returns sustainably to target.

The bank's forecasts show inflation peaking at 3.9% in the second quarter before gradually easing toward 2%, the midpoint of the target range, by mid-2027.

DBS noted that the Monetary Policy Committee's unanimous vote in favor of the rate hike marked a notable shift from the May meeting, when views were divided, and reflected the central bank's renewed commitment to fighting inflationary pressures.

Weak Chinese inflation and geopolitical tensions limit gains

Despite the positive momentum, the latest economic data from China limited the New Zealand dollar's gains, given that China is New Zealand's largest trading partner.

China's National Bureau of Statistics said the consumer price index rose 1% year on year in June, down from 1.2% in the previous month and below market expectations of 1.1%.

On a monthly basis, inflation fell 0.3%, a larger decline than expected, reflecting continued weakness in price pressures across the Chinese economy.

Meanwhile, the US dollar continued to draw support from escalating geopolitical tensions, as relations between the United States and Iran deteriorated further for a second consecutive day, with both sides exchanging fresh threats.

The worsening geopolitical backdrop increased demand for safe-haven assets, which could limit further gains in NZD/USD in the near term.

China plans to deploy a constellation of more than 1,000 remote sensing satellites to monitor Central Asia, according to Chinese state media outlets Xinhua and People's Daily.

The first batch, consisting of five satellites from the Tianwu Constellation, is expected to be launched into orbit by the end of 2026.

Joint regional project aims to strengthen environmental monitoring amid data concerns

The project is being presented as a joint initiative with Kazakhstan, Uzbekistan, and Tajikistan. According to the official announcement, it is designed to monitor environmental changes and help mitigate the impact of natural disasters and climate change.

However, remote sensing satellites are also known as "eyes in the sky" because of their ability to collect a wide range of data for both civilian and military purposes. The satellites will be owned by China, and all data collected will be processed within China, while Central Asian countries will receive only limited access to that information.

Beijing expands influence in AI, water management, and infrastructure across Central Asia

Kai-Fu Lee, founder and CEO of Beijing-based startup 01.AI, which is backed by Alibaba and Xiaomi, hosted a strategic seminar for the Kazakh government attended by most cabinet ministers and senior officials.

The seminar was aimed at advising policymakers on selecting, implementing, and deploying artificial intelligence models. Central Asia has become an increasingly competitive battleground between US and Chinese AI models seeking regional dominance.

Kai-Fu Lee also serves on the Artificial Intelligence Council of Kazakh President Kassym-Jomart Tokayev, advising the president on AI-related matters.

Meanwhile, Beijing Zhongguancun Tongli Technology Service Co., Ltd. signed an agreement with the Astana AI Film Festival Foundation to jointly finance, produce, and distribute AI-generated media content, according to Kazakhstan's Kazinform news agency.

In water resource management, China continues to deepen cooperation with Central Asian countries.

Kazakhstan's Ministry of Water Resources and Irrigation signed an agreement with the Chinese Embassy in Astana to launch a joint degree program between the Kazakh National University of Water Management and Irrigation and North China University of Water Resources and Electric Power. The initiative will allow Kazakh water management specialists to study in China, according to DKNews.kz.

The agreement also includes the establishment of a joint training center.

In Uzbekistan, officials from the Ministry of Water Resources met with China's Beijing Hrunan Technology Co., Ltd. to discuss modernizing water management infrastructure in the Jizzakh region, according to the country's official UzA news agency.

Kazakhstan

The governor of Kazakhstan's Abai Region announced the signing of memorandums of understanding with China's DDS Group to establish an industrial city with investments totaling $1.5 billion.

Officials also revealed an agreement with China's Jiachen Group to build an aluminum smelter with an investment of $1 billion.

Details of both agreements, including financing arrangements and ownership structures, have not yet been disclosed.

Separately, state-controlled China Nonferrous Metal Mining (CNMC) established a new subsidiary in Kazakhstan under the name GLY Minerals Ltd.

Given the scale of CNMC's existing operations in Kazakhstan, the new company is widely expected to oversee another major project.

One CNMC subsidiary is currently building a $1.56 billion copper smelter in the Abai Region, while another holds a 70% stake in a copper mining company in the Aktobe Region, where CNMC plans to invest an additional $600 million.

Kyrgyzstan

State-owned Eldik Bank will borrow up to 1 billion yuan, equivalent to just under $150 million, from the China Development Bank, according to Economist.kg.

The bank intends to use the funding to support small and medium-sized enterprises operating in infrastructure, green energy, manufacturing, and agriculture.

The report added that the agreement is significant because it provides long-term financing for local entrepreneurs, helping them modernize their production facilities.

Turkmenistan

Three Turkmen universities have signed agreements with China's Ministry of Education to launch Chinese language programs in Turkmenistan, conduct joint research and educational activities, strengthen cultural ties, and establish a unified education, culture, and information platform, according to Turkmen Portal.

At the same time, China's ambassador to Ashgabat awarded ten scholarships to Turkmen students to pursue higher education in China, according to the Turkmen government's official website.

China has also launched a freight rail service linking Qinghai Province in central China with the Balkan Region of Turkmenistan.

The region serves as a key logistics hub for transporting goods to Iran, Turkey, and European markets, according to Orient.tm.

The inaugural train, carrying 55 shipping containers, is expected to complete the journey in 14 to 15 days.

Uzbekistan

The Uzbekistan Textile and Garment Industry Association signed a memorandum of understanding with China's Xinjiang Production and Construction Corps to promote the long-term development of mutually beneficial partnerships, according to UzDaily.uz.

Wall Street's major indexes advanced on Thursday, supported by strong gains in semiconductor stocks that helped offset geopolitical concerns following renewed hostilities between the United States and Iran. Meanwhile, Meta Platforms shares declined after a Reuters report revealed plans to produce its own artificial intelligence chip.

The US military announced on Wednesday that it had launched another round of strikes against Iran aimed at ensuring continued shipping through the Strait of Hormuz. Tehran responded with attacks targeting US assets in Kuwait and Bahrain, deepening the confrontation as the fragile ceasefire agreement came under increasing strain.

Semiconductor rally offsets geopolitical concerns and lifts US indexes

The Philadelphia Semiconductor Index (SOX) surged about 5% in early trading, putting it on track for a second consecutive session of gains.

Applied Materials led the sector higher, with its shares jumping 9.4% to become one of the S&P 500's top performers, while the information technology sector gained 1.5%.

Micron Technology also climbed 9% after announcing plans to invest more than $250 billion in the United States by 2035 to meet growing demand for memory chips driven by artificial intelligence.

In contrast, Meta Platforms fell 1% after Reuters, citing an internal memo, reported that the company plans to begin production of its in-house AI chip in September. The decline weighed on the communication services sector, limiting gains in the S&P 500.

Investor sentiment toward AI-related stocks has been volatile in recent sessions amid concerns over whether the sector can sustain the rally that has pushed US equities to record highs in 2026 despite ongoing tensions in the Middle East.

"The S&P 500 and Nasdaq delivered exceptionally strong performance during the first half of the year, largely driven by memory chip companies," said Michael Hewson, Chief Market Analyst at iFOREX.

"There are concerns about whether these companies can continue delivering record revenue and profit growth, and when that coincides with the breakdown of the Middle East ceasefire, it creates a negative mix for markets," he added.

IBM shares fell 2.7%, while Microsoft lost 1.4% after Bloomberg reported that Starbucks had turned to artificial intelligence solutions that reduce its reliance on the two companies.

As of 10:06 a.m. ET, the Dow Jones Industrial Average was up 87.73 points, or 0.17%, at 52,436.12.

The S&P 500 gained 30.23 points, or 0.40%, to 7,512.94, while the Nasdaq Composite rose 160.02 points, or 0.62%, to 26,030.68.

On the economic front, the number of Americans filing new claims for unemployment benefits declined last week, signaling continued resilience in the labor market despite slower job growth in June.

On the monetary policy front, the Federal Reserve, led by Kevin Warsh, left interest rates unchanged at its June meeting. However, the minutes released on Wednesday showed that a small number of policymakers saw a case for raising borrowing costs before the committee ultimately agreed to keep rates on hold.

According to LSEG data, markets continue to price in at least one 25-basis-point Federal Reserve rate hike before the end of the year.

Among individual stocks, PepsiCo fell 4.7% despite reporting second-quarter revenue that exceeded analysts' expectations.

Market breadth was positive, with advancing stocks outnumbering decliners by 1.71-to-1 on the New York Stock Exchange and by 1.85-to-1 on the Nasdaq.

The NYSE recorded 28 new 52-week highs and 22 new lows, while neither the S&P 500 nor the Nasdaq Composite posted new intraday highs or lows during the session.