Markets navigated a complex session on Thursday as major central banks held rates steady while President Trump and Chinese President Xi Jinping reached a trade truce that fell short of transformative breakthroughs.
The US dollar and gold strengthened broadly, while equity markets pulled back on concerns about AI spending returns and tempered Federal Reserve rate cut expectations.
Check out the forex news and economic updates you may have missed in the latest trading session!
News Headlines & Data:
- President Trump and Chinese President Xi Jinping reached a significant trade truce during their meeting in South Korea. The meeting, described by Trump as “incredible” and “a 12 out of 10,” marks the first face-to-face encounter between the two leaders in six years and signals a temporary de-escalation of their ongoing trade conflict.
- New Zealand ANZ Business Confidence for October 2025: 58.1 (49.9 forecast; 49.6 previous)
- Australia Export Prices for September 30, 2025: -0.9% q/q (1.5% q/q forecast; -4.5% q/q previous)
- Australia Import Prices for September 30, 2025: -0.4% q/q (1.0% q/q forecast; -0.8% q/q previous)
- Bank of Japan Interest Rate Decision: 0.5% (0.5% forecast; 0.5% previous); two members dissented, Governor Ueda said the BOJ wants additional data on domestic wage-setting behaviors before adjusting rates
- France GDP Growth Rate Prel for September 30, 2025: 0.9% y/y (0.7% y/y forecast; 0.8% y/y previous); 0.5% q/q (0.1% q/q forecast; 0.3% q/q previous)
- Swiss KOF Leading Indicators for October 2025: 101.3 (98.5 forecast; 98.0 previous)
- Germany Unemployment Rate for October 2025: 6.3% (6.4% forecast; 6.3% previous)
- Germany GDP Growth Rate Flash for September 30, 2025: 0.0% q/q (0.1% q/q forecast; -0.3% q/q previous); 0.3% y/y (0.2% y/y forecast; 0.2% y/y previous)
- Germany Consumer Price Index Growth Rate Prel for October 2025: 0.3% m/m (0.3% m/m forecast; 0.2% m/m previous); 2.3% y/y (2.3% y/y forecast; 2.4% y/y previous)
- Euro area Economic Sentiment for October 2025: 96.8 (95.5 forecast; 95.5 previous)
- Euro area GDP Growth Rate Flash for September 30, 2025: 1.3% y/y (1.1% y/y forecast; 1.5% y/y previous); 0.2% q/q (0.1% q/q forecast; 0.1% q/q previous)
- Euro area Unemployment Rate for September 2025: 6.3% (6.3% forecast; 6.3% previous)
- Euro area ECB Interest Rate Decision: 2.15% (2.15% forecast; 2.15% previous); deposit rate held at 2.0%
- During the press conference, President Christine Lagarde highlighted ongoing concerns about weak euro area growth, persistent inflation risks, and signaled that future policy decisions will remain data-dependent, cautioning that it is still too early to discuss rate cuts.
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Thursday saw unusual price behavior and correlations, likely reflecting divergent central bank messaging and mixed reactions to the Trump-Xi trade agreement. The Bank of Japan holding rates at 0.5% rather than hike, while the European Central Bank maintained its deposit rate at 2.0% for a third consecutive meeting, pushing off rate cut expectations along the way.
The S&P 500 fell 0.34%, likely due to concerns from the tech sector over massive artificial-intelligence spending. This sent Meta Platforms down 11%, dragging several megacaps lower. The selloff occurred despite the US-China trade truce reducing geopolitical fears and trade uncertainty.
Gold traded higher throughout the session and gaining approximately 2.39% to reach $4,024.50, continuing its record-breaking performance despite US dollar strength and amid reduced Fed rate cut expectations. Fiscal sustainability concerns surrounding the U.S. government shutdown may be the driver, along with possible uncertainty of execution surrounding the latest U.S. – China truce.
WTI crude oil declined slightly for the day by 0.15% to close near $59.90, after trading mostly sideways for the session. This likely reflected traders balancing ongoing demand/supply concerns, and muted reactions to geopolitical developments.
Bitcoin suffered notable losses, falling 3.55% to approximately $107,492, marking one of the session’s weakest performers, likely a reaction to U.S. Dollar and gold strength, and some sympathy weakness overflowing from the tech sector.
The 10-year Treasury yield rose one basis point to 4.09%, remaining above the 4% threshold as bond markets continued to digest the Fed’s tempered rate cut expectations and central bank policy decisions.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The US dollar posted broad gains on Thursday despite mixed global economic signals, demonstrating resilience across multiple trading sessions and closing higher against all major currencies.
During the Asian session, the dollar traded net lower against major currencies as markets digested the Bank of Japan’s policy decision, but likely focused more on the Powell’s uncertain outlook for a December rate hike, shared at yesterday’s Fed press conference. Overall, volatility remained relatively low, making the yen’s bearish move notable, tumbling after BOJ Governor Ueda’s press conference as Ueda pointed to US tariffs and the need to wait for more data, including spring wage negotiations before hiking rates further.
From the London open through just ahead of the US equities open, the dollar traded net higher against major currencies, building momentum on the fresh Fed theme as European traders take their time to price in yesterday’s events.
Just before the US equities open, the dollar experienced a brief pullback against major currencies before stabilizing for the remainder of the session. The dollar hit a three-month high during Thursday’s trading, again, likely supported by Fed Chair Jerome Powell’s blunt warning that investors need to rein in expectations for a December rate cut on Thursday.
By Thursday’s close, the dollar traded positive against all major currencies for the day, with particular strength against the yen, which remained under pressure from the BOJ’s cautious stance on rate hikes.
Upcoming Potential Catalysts on the Economic Calendar
- New Zealand ANZ Roy Morgan Consumer Confidence for October 2025 at 9:00 pm GMT
- Japan Tokyo CPI for October 2025 at 11:30 pm GMT
- Japan Jobs/applications ratio for September 2025 at 11:30 pm GMT
- Japan Unemployment Rate for September 2025 at 11:30 pm GMT
- Japan Retail Sales for September 2025 at 11:50 pm GMT
- Japan Industrial Production Prel for September 2025 at 11:50 pm GMT
- Australia Private Sector Credit for September 2025 at 12:30 am GMT
- Australia Producer Price Index for September 30, 2025 at 12:30 am GMT
- Australia Housing Credit for September 2025 at 12:30 am GMT
- China Manufacturing PMIs for October 2025 at 1:30 am GMT
- Japan Housing Starts for September 2025 at 5:00 am GMT
- Germany Retail Sales for September 2025 at 7:00 am GMT
- Germany Import Price Index for September 2025 at 7:00 am GMT
- U.K. Nationwide Housing Prices for October 2025 at 7:00 am GMT
- Swiss Retail Sales for September 2025 at 7:30 am GMT
- France Consumer Price Index Growth Rate Prel for October 2025 at 7:45 am GMT
- Euro area Consumer Price Index Growth Rate Flash for October 2025 at 10:00 am GMT
- Canada GDP Prel for September 2025 at 12:30 pm GMT
- U.S. Core PCE Price Index for September 2025 at 12:30 pm GMT
- U.S. Personal Income & Spending for September 2025 at 12:30 pm GMT
- U.S. Employment Cost Index for September 30, 2025 at 12:30 pm GMT
- U.S. Fed Logan Speech at 1:30 pm GMT
- U.S. Chicago PMI for October 2025 at 1:45 pm GMT
- U.S. Fed Bostic Speech at 4:00 pm GMT
Friday’s calendar presents multiple potential market catalysts that could shape sentiment heading into the weekend. The Trump-Xi trade agreement will continue to be assessed by markets, particularly regarding implementation details and whether it represents genuine progress or temporary positioning. Any fresh commentary from either administration could move risk assets and currencies.
The ongoing US government shutdown remains a wildcard, with delayed economic data hampering the Fed’s ability to assess economic conditions accurately. Updates on shutdown negotiations could impact dollar positioning and Treasury markets quickly if news were to break of a deal to reopen was made.
Euro area flash CPI data will be closely watched following the ECB’s decision to hold rates steady. Any significant deviation from expectations could influence euro positioning and provide clues about the ECB’s future policy path, particularly given President Lagarde’s emphasis on data dependency.
Canada’s GDP figures will offer insight into the health of the Canadian economy amid ongoing trade uncertainty and provide context for Bank of Canada policy expectations. Meanwhile, the US Core PCE Price Index and Employment Cost Index will be scrutinized for signals about inflation persistence, potentially influencing Fed rate cut expectations and dollar direction. Various Fed speeches throughout the day may offer additional clarity on policymakers’ views following Wednesday’s rate decision and Chair Powell’s hawkish messaging.
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!
