Markets suffered another sharp leg lower on Thursday as a growing chorus of anti-cut Federal Reserve officials dampened December rate cut expectations, overshadowing the end of the government shutdown and triggering broad-based selling across equities and crypto while the dollar struggled to find direction.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
- U.S. government shutdown officially ends after 43 days as President Trump signs spending bill, though data collection delays persist
- New Zealand Electronic Card Retail Sales for October 2025: 0.2% m/m (0.4% m/m forecast; -0.5% m/m previous)
New Zealand Visitor Arrivals for September 2025: 9.6% y/y (3.6% y/y forecast; 7.5% y/y previous) - Japan PPI for October 2025: 2.7% y/y (2.4% y/y forecast; 2.7% y/y previous); 0.4% m/m (0.2% m/m forecast; 0.3% m/m previous)
- Australia Consumer Inflation Expectations for November 2025: 4.5% (4.5% forecast; 4.8% previous)
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Australia Employment Change for October 2025: 42.2k (20.0k forecast; 14.9k previous)
- Australia Unemployment Rate for October 2025: 4.3% (4.4% forecast; 4.5% previous)
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U.K. GDP for September 2025: 1.1% y/y (1.1% y/y forecast; 1.3% y/y previous); -0.1% m/m (0.1% m/m forecast; 0.1% m/m previous)
- U.K. Goods Trade Balance Non-EU for September 2025: -6.82B (-7.7B forecast; -8.29B previous)
- U.K. Industrial Production for September 2025: -2.0% m/m (-0.1% m/m forecast; 0.4% m/m previous); -2.5% y/y (-1.0% y/y forecast; -0.7% y/y previous)
- U.K. Manufacturing Production for September 2025: -2.2% y/y (-0.9% y/y forecast; -0.8% y/y previous); -1.7% m/m (-0.4% m/m forecast; 0.7% m/m previous)
- Swiss Producer & Import Prices for October 2025: -1.7% y/y (-1.8% y/y forecast; -1.8% y/y previous); -0.3% m/m (-0.3% m/m forecast; -0.2% m/m previous)
- China Outstanding Loan Growth for October 2025: 6.5% y/y (6.4% y/y forecast; 6.6% y/y previous)
- China New Loans for October 2025: 220.0B (550.0B forecast; 1,290.0B previous)
- China M2 Money Supply for October 2025: 8.2% (8.2% forecast; 8.4% previous)
- Euro area Industrial Production for September 2025: 0.2% m/m (0.5% m/m forecast; -1.2% m/m previous); 1.2% y/y (1.4% y/y forecast; 1.1% y/y previous)
- Federal Reserve Bank of Minneapolis President Neel Kashkari said he didn’t support the US central bank’s last interest-rate cut.
- On Thursday, Federal Reserve Bank of St. Louis President Musalem said officials should move cautiously with further interest rate cuts
- Boston Fed’s Collins says she sees “relatively high bar” for additional easing, citing stubborn inflation and tariff impacts
Broad Market Price Action:
Overlay of USD vs. Majors Forex Chart by TradingView
Thursday’s session delivered a punishing risk reversal, possibly as late day Fed hawkishness extinguished hopes for a December rate cut, overshadowing the official US government reopening.
The S&P 500 plunged 1.54% to close at 6,743.6, wiping out all of November’s gains as technology shares bore the brunt of the selling pressure. After slight gains in Asia, the index began to drift lower during the London session, then accelerated its decline during U.S. trading hours, correlating with a series of hawkish Fed speeches. Fed officials Kashkari and Musalem both signaled caution on further rate cuts during the U.S. session, with Kashkari revealing he didn’t support October’s cut and remains undecided on December. The selloff intensified into the afternoon as traders rotated out of high-valuation tech names amid concerns about stretched valuations in an environment where rate cuts may be delayed.
Gold saw early gains, but fell with the rest of the major assets during the U.S. session. The precious metal rallied steadily from the London open through the U.S. morning session, but couldn’t escape the broad market selloff despite weakness in the U.S. dollar. There was no clear catalysts for traders dumping the precious metal, possibly signaling profit taking once again after its early November rebound from below $4,000 to $4,250.
WTI crude oil traded relatively flat during Asian hours, then surged during the London morning, possibly benefiting from the government shutdown resolution reducing uncertainty around economic data and policy direction. The rally may have also reflected positioning adjustments as traders anticipated that resumed government operations could provide clearer visibility on U.S. demand trends. During the U.S. session, oil retraced some of its London gains but held onto most of the day’s advance, closing solidly positive.
Bitcoin suffered a particularly brutal selloff, plummeting 3.13% to close at $98,705.6—falling decisively below the $100,000 threshold. The cryptocurrency traded with modest volatility during Asian hours but began declining steadily from the London open, with the selloff intensifying during U.S. trading. The weakness likely reflected a combination of factors: the net hawkish Fed rhetoric weighing on risk assets generally, and possibly technical traders jumping on to the newly formed downtrend since the start of October when it topped out over $126,000.
The 10-year Treasury yield rose 1.03% to 4.104%, climbing steadily throughout the session as the government reopening removed some uncertainty, though doubts remain about when delayed economic data will actually be released. Bond yields climbed despite weak UK economic data and dovish Bank of England expectations, suggesting that U.S.-specific factors—particularly the hawkish Fed commentary and government reopening—dominated trading.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Forex Chart by TradingView
The U.S. dollar closed mixed against major currencies on Thursday, posting net losses that outweighed its gains despite shifting narratives across the three major trading sessions—highlighting the complex interplay between government reopening relief, persistent data uncertainty, and divergent central bank trajectories.
During the Asian session, the dollar saw low volatility but posted net gains against most major currencies. It possibly benefiting by the official reopening of the US government signed the bill late Wednesday evening in the US, but was likely tempered by the uncertainty about when economic data releases would resume.
The London session marked a decisive shift, with the dollar trading lower on net against major currencies before staging a modest rebound ahead of the U.S. open. The initial weakness correlated with the release of weaker-than-expected UK economic data—particularly the surprise -0.1% monthly GDP contraction in September and sharp drops in industrial and manufacturing production. We don’t think this was the driver, and more likely some combination of risk-on relief after the end of the US government shutdown, and possibly rising expectations of weak US data ahead, likely supporting Fed rate cut bets.
During the U.S. trading session, the dollar traded in a distinctly mixed fashion: initially moving lower, then stabilizing and rebounding slightly in the afternoon. The early U.S. weakness had no clear catalyst beyond continuation of the London session’s dynamics, but the afternoon stabilization and modest rebound correlated with public commentary from Fed officials Kashkari and Musalem.
Kashkari’s revelation that he didn’t support October’s rate cut and Musalem’s call for caution on further easing appeared to provide some support for the greenback, though not enough to reverse the day’s losses. The dollar’s inability to rally more forcefully despite the hawkish Fed commentary suggests traders remained focused on the persistent data uncertainty, with concerns that delayed economic reports could eventually reveal labor market softness that would justify easing.
Upcoming Potential Catalysts on the Economic Calendar
- China House Price Index for October 2025 at 1:30 am GMT
- China Unemployment Rate for October 2025 at 2:00 am GMT
- China Retail Sales for October 2025 at 2:00 am GMT
- China Industrial Production for October 2025 at 2:00 am GMT
- China Fixed Asset Investment (YTD) for October 2025 at 2:00 am GMT
- Germany Bundesbank Balz Speech at 7:15 am GMT
- France Inflation Rate Final for October 2025 at 7:45 am GMT
- Euro area GDP Growth Rate 2nd Est for September 30, 2025 at 10:00 am GMT
- Euro area Employment Change Prel for September 30, 2025 at 10:00 am GMT
- Euro area Trade Balance for September 2025 at 10:00 am GMT
- Euro area ECB Elderson Speech at 10:30 am GMT
- Euro area ECB Buch Speech at 11:00 am GMT
- Canada Manufacturing & Wholesale Sales Final for September 2025 at 1:30 pm GMT
- Euro area ECB Elderson Speech at 1:30 pm GMT
- U.S. Fed Schmid Speech at 3:05 pm GMT
- U.S. Fed Logan Speech at 7:30 pm GMT
- U.S. Fed Bostic Speech at 8:20 pm GMT
Friday’s focus will center on China’s comprehensive economic data dump, with retail sales and industrial production providing critical insights into whether Beijing’s stimulus measures are gaining traction beyond temporary factors.
The flash eurozone GDP and employment figures could influence ECB rate cut expectations, particularly given recent dovish commentary from policymakers.
However, the day’s most significant market driver may be the continued stream of Fed speeches, with three more officials (Schmid, Logan, and Bostic) scheduled to speak.
Following Thursday’s hawkish turn from Kashkari and Musalem, markets will scrutinize whether this cautious stance is gaining broader traction among policymakers, which could further diminish December rate cut odds and pressure risk assets.
Any fresh developments on government data release timing—particularly regarding the delayed October CPI and jobs reports—could also trigger volatility as traders assess the Fed’s ability to make data-dependent decisions at the December meeting.
With December rate cut odds now hovering around 50-50, any additional hawkish rhetoric could tip the scales decisively toward a pause, potentially extending Thursday’s equity and crypto selloff while supporting the dollar.
Stay frosty out there, forex friends, and don’t forget to check out our Forex Correlation Calculator when planning to take on risk!
