Markets delivered a sharp risk-off session on Thursday as almost all major assets suffered steep decline alongside cryptocurrencies, while the U.S. dollar rebounded to finish as the best performing major asset and currency despite deteriorating labor market data showing job openings at their lowest level since 2020.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
- Australia Balance of Trade for December 2025: 3.37B (4.9B forecast; 2.94B previous)
- Germany Factory Orders for December 2025: 7.8% m/m (-4.2% m/m forecast; 5.6% m/m previous)
- France Industrial Production for December 2025: -0.7% m/m (0.3% m/m forecast; -0.1% m/m previous)
- Euro area Retail Sales for December 2025: -0.5% m/m (0.2% m/m forecast; 0.2% m/m previous); 1.3% y/y (2.0% y/y forecast; 2.3% y/y previous)
- The Bank of England kept Bank Rate unchanged at 3.75% in a close 5–4 split vote, with four MPC members advocating a 25 bp cut to 3.5% as inflation falls back toward target and growth remains subdued. In the press conference, Governor Andrew Bailey said the risk of persistent inflation is diminishing but stressed the need for more evidence of a sustainable return to the 2% target before cutting, while signaling that further rate reductions are likely later this year if disinflation continues.
- U.S. Challenger Job Cuts for January 2026: 108.44k (43.0k forecast; 35.55k previous)
- U.S. Initial Jobless Claims for January 31, 2026: 231.0k (214.0k forecast; 209.0k previous)
- Euro area ECB Press Conference
- U.S. JOLTs Job Openings for December 2025: 6.54M (7.0M forecast; 7.15M previous)
- JOLTs Job Quits for December 2025: 3.2M (3.15M forecast; 3.16M previous)
- The ECB left all three key interest rates unchanged today, keeping the deposit rate at 2% as it judged that inflation is on track to stabilize around its 2% target while the euro area economy remains resilient. In the press conference, President Lagarde stressed a data‑dependent, meeting‑by‑meeting approach with no pre‑commitment on the future rate path, noting that underlying inflation and wage pressures continue to ease and that risks to the outlook are broadly balanced.
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Broad Market Price Action:
U.S. equities declined for a second consecutive session, with the S&P 500 falling 1.7% to close around 6,782. The index weakened throughout the trading day, with losses accelerating during the afternoon following tech sector weakness and mounting concerns about labor market softening. The selloff appeared to correlate with a sharp 8.4% plunge in Qualcomm following cautious guidance on softer memory demand, deepening losses across the semiconductor complex. Despite the weaker labor market data that might typically support dovish Fed policy expectations, equities failed to find support, possibly reflecting concerns that slowing demand could weigh on corporate earnings even if rate cuts materialize.
WTI crude oil declined 1.6% to settle near $63.04 per barrel. The drop appeared to correlate with broader risk-off sentiment and possibly demand concerns stemming from the weak JOLTs report showing job openings falling to 6.54 million versus 7.0 million expected. With no direct oil-specific catalysts during the session, the move likely reflected positioning adjustments as traders reassessed global demand prospects in light of softening U.S. labor market conditions.
Gold declined 4.0% to trade around $4,813, pulling back sharply from recent highs despite typically benefiting from weaker labor market data that suggests room for Fed easing. The magnitude of the decline appeared outsized relative to typical correlations with U.S. economic data, possibly reflecting profit-taking after the precious metal’s recent rally or technical positioning adjustments. The move came despite falling Treasury yields that would ordinarily support gold prices, suggesting internal dynamics in the gold market dominated Thursday’s price action.
Bitcoin suffered steep losses, plunging 13% to trade near $63,500extending a violent week-long deleveraging event that has now wiped out over $1 billion in leveraged positions across the past 24 hours alone. The cryptocurrency’s collapse appeared driven primarily by forced liquidations in futures markets, with approximately $980 million in bullish leveraged bets automatically closed as prices breached critical technical levels, marking one of the most severe deleveraging episodes of the current cycle.
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Treasury yields declined, with the 10-year yield falling approximately 2.0% to around 4.21%. The bond market move likely correlated with the weaker-than-expected JOLTs report showing job openings at their lowest level in over four years, reinforcing expectations that labor market softening could provide room for Fed rate cuts in 2026. The decline in yields came despite both the ECB and Bank of England signaling caution about further easing, suggesting U.S.-specific labor market concerns and broad risk aversion behavior were the main drivers.
FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Majors – Chart Faster with TradingView
The U.S. dollar experienced volatile, but mostly choppy and sideways trading throughout Thursday, ultimately emerging as the best performing major currency on the day.
During the Asian session, the U.S. dollar started off with low volatility and choppy trading before seeing bullish behavior mid-morning that stabilized heading into the London session. With no major regional economic releases to drive direction, the dollar’s modest strength likely reflected overnight positioning adjustments ahead of the day’s heavy calendar of central bank decisions and U.S. labor market data.
The London session brought the day’s most significant monetary policy catalysts. The dollar briefly saw bullish behavior in early European hours before pulling back heading into the major central bank events. The Bank of England held rates at 3.75% in a closer-than-expected 5-4 vote, with four members supporting a cut versus the 7-2 split most economists anticipated. Governor Andrew Bailey stated “there should be scope for some further reduction in bank rate this year,” a somewhat dovish signal that initially pressured sterling. However, the pound’s weakness provided only modest support to the dollar as traders likely positioned for upcoming U.S. data releases.
The ECB held all three key rates unchanged as expected, with President Lagarde maintaining the central bank is in a “good place” regarding both rates and inflation. The press conference emphasized data dependence with no preset rate path, with Lagarde noting the ECB is keeping a “close eye” on exchange rate developments amid euro strength. The euro traded choppy against the dollar following the decision, with the currency showing resilience despite the hold decision possibly reflecting market positioning that had already priced in no change.
The U.S. session saw the dollar dip after U.S. traders hopped online, then rebound following the U.S. equities open before pulling back again after the London close. The JOLTs report at 10:00 am ET showed job openings plunging to 6.54 million from a downwardly revised 6.93 million in November, well below the 7.0 million forecast and marking the lowest level since September 2020. The weak labor demand data would typically pressure the dollar on dovish Fed implications, yet the greenback stabilized and drifted higher heading into the Thursday close.
At Thursday’s close, the dollar was the best performing major currency on a daily basis. This resilience appeared to reflect broad risk aversion behavior more than anything else, overshadowing hesitance from both European central banks for further rate cuts, and even as U.S. labor market data softened.
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Upcoming Potential Catalysts on the Economic Calendar
- Japan Household Spending for December 2025 at 11:30 pm GMT
- Japan Leading Economic Index Prel for December 2025 at 5:00 am GMT
- Germany Industrial Production for December 2025 at 7:00 am GMT
- Germany Balance of Trade for December 2025 at 7:00 am GMT
- U.K. Halifax House Price Index for January 2026 at 7:00 am GMT
- France Balance of Trade for December 2025 at 7:45 am GMT
- Swiss Unemployment Rate for January 2026 at 8:00 am GMT
- Euro area ECB Survey of Professional Forecasters at 9:00 am GMT
- U.K. BBA Mortgage Rate for January 2026 at 10:00 am GMT
- Canada Employment Situation Update for January 2026 at 1:30 pm GMT
- Canada Ivey PMI s.a for January 2026 at 3:00 pm GMT
- University of Michigan Consumer Sentiment Index & Inflation Expectations for February 2026 at 3:00 pm GMT
- U.S. Fed Jefferson Speech at 5:00 pm GMT
- U.S. Consumer Credit Change for December 2025 at 8:00 pm GMT
Friday’s calendar features Canadian employment data at 1:30 pm GMT that could spark volatility across North American currency pairs, with markets watching for signs whether labor market softening is isolated to the United States or represents a broader North American trend. The Canadian jobs report arrives as the Bank of Canada maintains its pause on rates, with any significant deviation from expectations potentially altering the bank’s policy trajectory.
During the U.S. session, the University of Michigan consumer sentiment survey at 3:00 pm GMT could provide insight into household inflation expectations and spending intentions. Following Thursday’s weak JOLTs data and elevated January job cuts, consumer confidence readings will be scrutinized for signs that labor market concerns are filtering through to household sentiment. Fed Vice Chair Jefferson’s speech at 5:00 pm GMT may offer additional color on how policymakers are interpreting the recent deterioration in labor demand indicators.
European data early Friday includes German industrial production and trade balance figures that could influence euro positioning, particularly after Thursday’s ECB decision signaled confidence in economic resilience. UK housing data may provide additional context for the Bank of England’s surprisingly close rate vote, with any signs of housing market weakness potentially reinforcing the case for earlier rate cuts in 2026.
Stay frosty out there, forex friends!
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