Central banks dominated Wednesday’s trading as the Federal Reserve delivered an expected rate cut while simultaneously clouding the outlook for December, triggering sharp reversals across asset classes and sending a clear message that policy is “not on a preset course.”
Check out the forex news and economic updates you may have missed in the latest trading session!
Headlines & Data:
- Australia Consumer Price Index Growth Rate for September 30, 2025: 3.2% y/y (2.9% y/y forecast; 2.1% y/y previous); 1.3% q/q (1.0% q/q forecast; 0.7% q/q previous)
- Japan Consumer Confidence for October 2025: 35.8 (35.5 forecast; 35.3 previous)
- Swiss Economic Sentiment Index for October 2025: -7.7 (-38.0 forecast; -46.4 previous)
- U.K. Monetary Developments for September 2025
- U.K. M4 Money Supply for September 2025: 0.6% m/m (0.3% m/m forecast; 0.4% m/m previous)
- U.K. Mortgage Approvals for September 2025: 65.94k (64.4k forecast; 64.68k previous)
- U.K. Net Lending to Individuals for September 2025: 7.0B (4.2B forecast; 6.0B previous)
- U.S. MBA Mortgage Applications for October 24, 2025: 7.1% (-0.3% previous)
- U.S. MBA 30-Year Mortgage Rate for October 24, 2025: 6.3% (6.37% previous)
- U.S. Pending Home Sales for September 2025: 0.0% m/m (1.3% m/m forecast; 4.0% m/m previous); -0.9% y/y (2.9% y/y forecast; 3.8% y/y previous)
- The Bank of Canada lowered its policy interest rate by 25 basis points to 2.25%, citing economic weakness from U.S. trade tariffs and signaling that, unless the outlook changes, this could mark the end of the current easing cycle.
- U.S. EIA Crude Oil Stocks Change for October 24, 2025: -6.86M (-0.96M previous)
- The Federal Reserve cut its benchmark interest rate by 25 basis points to a 3.75%-4% range, acknowledging moderate economic growth, slower job gains, and inflation that remains above target. The FOMC cited heightened uncertainty due to the government shutdown and lack of fresh data, and signaled further adjustments will depend on incoming economic indicators, with the balance sheet runoff ending December 1.
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Wednesday’s session delivered a masterclass in central bank-driven volatility, with markets waking up and experiencing sharp moves during the U.S. session, following Chair Jerome Powell’s hawkish pivot that contradicted prior expectations for continued policy easing.
The S&P 500 initially traded higher following the Fed’s expected quarter-point cut, but reversed sharply during Powell’s press conference after the Fed chair pushed back against market assumptions of a December rate cut. The index still managed to rebound ahead of the close, potentially on positive expectations for several megacap tech earnings releases after the bell.
Gold experienced significant intraday swings, initially rallying nearly 2% during the morning London session before reversing sharply at the start of the U.S. session, likely intraday profit taking ahead of the FOMC event. Gold spike lower in the afternoon U.S. session, correlation with Powell’s downplay of the next rate move, ultimately closing flat around $3,947 per ounce.
WTI crude oil bucked the broader risk-off trend, rising 0.65% to close near $60 as the substantial drawdown in U.S. crude inventories (-6.86 million barrels versus expectations of a smaller decline) likely provided short-term fundamental support despite recent concerns about slowing global demand. Oil had trended higher throughout the U.S. session ahead of the top-tier events.
Bitcoin suffered notable losses, falling 1.77% to trade around $110,821 as the cryptocurrency sold off before and following the Fed decision, with rising real yields and a stronger dollar likely weighing on the digital asset.
The 10-year Treasury yield spiked dramatically following Powell’s remarks, surging to 4.10% (up approximately 2.26% on the day) as bond markets rapidly repriced rate cut expectations. The two-year yield jumped even more sharply, rising to 3.6% as traders reduced December easing bets from above 90% before the press conference to around 60% afterward.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The U.S. dollar posted significant gains on Wednesday, rallying broadly against major currencies following a volatile session punctuated by the Federal Reserve’s hawkish messaging that caught markets off guard.
During the Asian session, the dollar traded mixed with slight net bullish momentum as markets positioned cautiously ahead of multiple central bank decisions. The Australian inflation data showing a sharp acceleration to 3.2% year-over-year provided initial support for risk sentiment but had limited lasting impact on dollar dynamics.
The greenback maintained its net bullish trajectory through the London morning session, and with not notable catalysts, it’s likely traders stayed in a holding pattern ahead the Bank of Canada and Federal Reserve decisions.
The critical turning point came during the U.S. afternoon session. Initially, the dollar dipped ahead of the FOMC statement at 2:00 PM ET as markets possible anticipated a straightforward quarter-point cut. However, Powell’s press conference beginning at 2:30 PM ET triggered a sharp dollar spike as the Fed chair delivered unexpectedly hawkish commentary.
Powell’s statement that a December rate cut is “not a foregone conclusion, far from it” and his emphasis that “policy is not on a preset course” sent shockwaves through currency markets. The dollar surged across the board, with the DXY index jumping approximately 0.5% as traders rapidly unwound expectations for near-term easing.
USD/CAD remained essentially flat (-0.01%) despite the Bank of Canada’s rate cut, as the Canadian central bank’s signal that it may be done easing provided offset to the dollar’s broader strength.
By the Wednesday session close, the U.S. dollar was up against all of the major currencies, with the exception of the Canadian dollar, in which it closed relatively flat.
Upcoming Potential Catalysts on the Economic Calendar
- New Zealand ANZ Business Confidence for October 2025 at 12:00 am GMT
- Australia Import & Export Prices for September 30, 2025 at 12:30 am GMT
- Bank of Japan Monetary Policy Statement & Quarterly Outlook Report at 3:00 am GMT
- France GDP Growth Rate Prel for September 30, 2025 at 6:30 am GMT
- Swiss KOF Leading Indicators for October 2025 at 8:00 am GMT
- Germany Unemployment Rate for October 2025 at 8:55 am GMT
- Germany GDP Growth Rate Flash for September 30, 2025 at 9:00 am GMT
- Euro area Economic Sentiment for October 2025 at 10:00 am GMT
- Euro area GDP Growth Rate Flash for September 30, 2025 at 10:00 am GMT
- Euro area Unemployment Rate for September 2025 at 10:00 am GMT
- U.S. Initial Jobless Claims for September 27, 2025
- U.S. GDP Growth Rate & Core PCE Prices (Q/Q) Adv for September 30, 2025
- European Central Bank Monetary Policy Statement at 1:15 pm GMT
- European Central Bank Press Conference at 1:45 pm GMT
- U.S. Fed Bowman Speech at 1:55 pm GMT
- U.S. Fed Logan Speech at 5:15 pm GMT
Thursday’s focus shifts to the Bank of Japan and European Central Bank monetary policy decisions, though market attention may remain partially fixated on today’s FOMC statement and any fresh developments from U.S.-China trade discussions following President Trump’s expected meeting with Chinese President Xi Jinping in South Korea.
The ECB is widely expected to hold rates unchanged, making the tone of the press conference and any updated economic projections particularly important for euro direction.
The BoJ decision could generate volatility in yen pairs, particularly after recent commentary from U.S. Treasury Secretary Bessent praising Japan’s commitment to central bank independence.
If released, U.S. advance GDP data and initial jobless claims will provide insight into economic momentum and labor market conditions, potentially sparking short-term market reactions
Any progress on resolving the U.S. shutdown could also influence market sentiment, though concrete developments appear unlikely in the near term.
Thursday is setting up for a potentially wild ride once again, so stay frosty out there forex friends and don’t forget to check out our Forex Correlation Calculator when planning to take on risk!
