Geopolitical tensions took center stage on Thursday as sweeping U.S. sanctions on Russian oil producers sent crude prices surging, while equity markets rallied on optimism surrounding upcoming U.S.-China trade talks and expectations for continued Federal Reserve easing.
Oil’s dramatic spike dominated market attention, though gains moderated by session’s end, while confirmation of next week’s Trump-Xi meeting provided a counterweight to energy-driven inflation concerns.
Check out the forex news and economic updates you may have missed in the latest trading session!
Headlines & Data:
Asia-Pacific:
- Reserve Bank of Australia October 2025 Bulletin: Small business conditions improving modestly, with better profitability and credit access due to cheaper borrowing and stronger lending competition
- Australia Balance of Trade for July 2025: 7.31B (5.25B forecast; 5.37B previous)
- Bank of Korea held policy rate steady at 2.50% for third consecutive meeting, with one dissenting vote favoring a cut
- Japan’s new Prime Minister Sanae Takaichi formed government, with markets anticipating potential fiscal stimulus measures
Europe:
- France Business Confidence for October 2025: 101.0 (94.0 forecast; 96.0 previous)
- France Business Climate Indicator for October 2025: 97.0 (94.0 forecast; 96.0 previous)
- U.K. CBI Industrial Trends Orders for October 2025: -38.0 (-28.0 forecast; -27.0 previous)
- U.K. CBI Business Optimism Index: -31.0 (-29.0 forecast; -27.0 previous)
- Euro area Consumer Confidence Flash for October 2025: -14.2 (-15.4 forecast; -14.9 previous)
- Turkey’s central bank cut interest rates by 100 basis points to 39.5% as anticipated, marking slower pace of easing after last month’s 250bp reduction
- Swiss National Bank’s first-ever published minutes suggest franc strength isn’t creating undue headwinds, lessening risks of December rate cut
North America:
- U.S. imposed sanctions on Russia’s largest oil producers Rosneft and Lukoil, marking radical escalation in pressure campaign against Moscow over Ukraine war
- White House confirmed Trump-Xi meeting for next Thursday at APEC Summit in South Korea, first face-to-face since Trump’s return to office in January
- Canada Retail Sales for August 2025: 1.0% m/m (1.0% m/m forecast; -0.8% m/m previous); 4.9% y/y (3.8% y/y forecast; 4.0% y/y previous)
- U.S. Existing Home Sales for September 2025: 1.5% m/m (-2.0% m/m forecast; -0.2% m/m previous)
- U.S. Kansas Fed Manufacturing Index for October 2025: 15.0 (6.0 forecast; 4.0 previous)
- Canadian Prime Minister Mark Carney pursuing meeting with Xi Jinping at APEC as part of effort to ease trade tensions and offset U.S. tariffs
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Thursday’s session was defined by the market’s response to geopolitical news, particularly U.S. sanctions targeting Russia’s two largest oil producers. The sanctions announcement during Asian hours sent shockwaves through energy markets.
WTI crude oil stole the spotlight with a powerful rally, surging to trade above $61 per barrel in what marked the largest single-day gain since the Israel-Iran conflict erupted on June 13. The sanctions on Rosneft and Lukoil—which jointly account for nearly half of Russia’s total oil exports—raised immediate concerns about potential supply disruptions. Indian refinery executives indicated the restrictions would make it impossible for Russian crude flows to continue, while the move sent shockwaves through China’s oil industry, which imports as much as 20% of its crude from Russia. Oil retreated from session highs to close up approximately 4% near $61.40, as traders weighed abundant global supplies against disruption risks.
The S&P 500 demonstrated resilience today, approaching all-time highs with gains near 0.6% to trade around 6,739. The equity rally gained momentum after the White House confirmed President Trump will meet Chinese President Xi Jinping on October 30, fueling hopes that leaders of the world’s two largest economies will attempt to de-escalate trade tensions. Energy shares participated in the broader advance, benefiting from the oil price surge, while technology megacaps including Tesla erased earlier losses to pace gains.
Gold rebounded slightly today to trade near $4,113 per ounce, likely on profit-taking emerged following the crush in price earlier this week. An argument can still be made that there are more buyers than sellers out there, thanks to Federal Reserve rate cut expectations and ongoing concerns about fiscal sustainability across developed markets.
Bitcoin recovered from recent weakness, climbing 2.1% to trade above $110,000. The cryptocurrency rebounded from a near four-month low of $103,659 reached last Friday after Trump threatened an additional 100% tariff on Chinese goods, though it remained well below the record high of $126,223 reached on October 6. No major updates from the news from, so this may be a technical rebound after the most recent fall from $114K on Monday to the strong support area around $107K.
The 10-year Treasury yield advanced approximately 1 basis point, hovering just below the psychologically significant 4% threshold. The rally in bond yields likely reflect falling U.S.-China trade fears, but also expectations of a stronger-than-expected U.S. CPI read on Friday.
The U.S. Dollar Index traded essentially flat near 99.0, with the greenback’s performance varying significantly across trading sessions and currency pairs as markets balanced geopolitical risk premiums against rate cut expectations and upcoming U.S. data.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The U.S. dollar traded choppy across different trading sessions on Thursday, ultimately closing mixed but mostly net negative against major currencies despite early Asian strength and energy market volatility.
During the Asian session, the dollar outperformed major currencies as markets digested the implications of fresh U.S. sanctions on Russian oil. The yen fell as markets bet on looser fiscal and monetary policy under Japan’s new Prime Minister Sanae Takaichi, with USD/JPY rising 0.3% to a 9-day high of 152.57. Higher oil prices potentially benefited the dollar given the U.S. role as a major producer.
Just ahead of the London open, the dollar began pulling back from Asian gains as positioning adjustments took hold. During the morning London session, the greenback traded mixed but arguably net bullish against major currencies.
The U.S. session saw the dollar trade net negative against major currencies despite the absence of major domestic economic data releases. The announcement that Trump will meet Xi Jinping next Thursday appeared to ease trade tensions, reducing safe-haven demand for the dollar. Canadian retail sales data showed August strength but disappointing September preliminary estimates, apparently drawing in some net buying against USD.
By Thursday’s close, the dollar finished mixed but mostly net negative. USD gained the most against the Japanese yen, while falling the most against the Kiwi and the Aussie, showing that broad risk-on sentiment may have been the biggest weight on the session. Overall, volatility was relatively muted as well, likely due to traders waiting for the delayed U.S. CPI data.
Upcoming Potential Catalysts on the Economic Calendar
- U.S. Fed Balance Sheet for October 22, 2025 at 8:30 pm GMT
- Australia S&P Global Manufacturing & Services PMI Flash for October 2025 at 10:00 pm GMT
- U.K. Gfk Consumer Confidence for October 2025 at 11:01 pm GMT
- Japan Inflation Rate for September 2025 at 11:30 pm GMT
- Australia RBA Bullock Speech at 12:05 am GMT
- Japan S&P Global Manufacturing & Services PMI Flash for October 2025 at 12:30 am GMT
- Japan Leading Indicators Index for August 2025 at 5:00 am GMT
- U.K. Retail Sales for September 2025 at 6:00 am GMT
- France Consumer Confidence for October 2025 at 6:45 am GMT
- Germany HCOB Manufacturing & Services PMI Flash for October 2025 at 7:30 am GMT
- Euro area ECB Consumer Inflation Expectations for September 2025
- Euro area HCOB Manufacturing & Services PMI Flash for October 2025 at 8:00 am GMT
- Euro area ECB Cipollone Speech at 8:00 am GMT
- U.K. S&P Global Manufacturing & Services PMI Flash for October 2025 at 8:30 am GMT
- U.S. Consumer Price Index for September 2025 at 12:30 pm GMT
- U.S. S&P Global Manufacturing & Services PMI Flash for October 2025 at 1:45 pm GMT
- UoM U.S. Consumer Sentiment Index for October 2025 at 2:00 pm GMT
Friday’s calendar features a critical release of delayed U.S. inflation data alongside a comprehensive snapshot of global economic activity through flash PMI surveys. The September CPI report, originally scheduled for October 15 but delayed by the government shutdown, will provide Federal Reserve officials with crucial information ahead of their October 29 policy meeting. The markets forecast core CPI to have climbed 0.3% for a third straight month, keeping the annual rate at 3.1%, as higher import duties continue gradually filtering through to consumers.
The global flash PMI surveys will provide insight into whether manufacturing weakness is spreading to services sectors across major economies, with particular focus on whether Germany and the broader eurozone can maintain any growth momentum.
Japanese inflation data will be scrutinized for implications regarding Bank of Japan policy trajectory, especially given market uncertainty following Prime Minister Takaichi’s election.
U.K. retail sales will offer perspective on consumer resilience amid ongoing fiscal concerns, while the University of Michigan consumer sentiment index will gauge American confidence amid trade uncertainty and the prolonged government shutdown.
U.S.-China trade headlines remain a key focus following confirmation of next week’s Trump-Xi meeting, with markets watching for any signals about potential tariff adjustments or extensions to the trade truce set to expire November 10. Any fresh developments regarding the U.S. government shutdown’s resolution could also impact market sentiment and dollar positioning heading into the weekend.
Stay frosty out there forex friends and don’t forget to check out our Forex Correlation Calculator when taking any trades!
