Markets delivered divergent performance at the start of a busy week, with the dollar sliding toward four-month lows, while gold surged above $5,000 for the first time and equities advanced on energy sector strength amid soaring natural gas prices.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
- Japan Leading Indicators Index for November 2025: 109.9 (110.5 forecast; 109.8 previous)
- Germany Ifo Business Climate for January 2026: 87.6 (88.4 forecast; 87.6 previous)
- Germany Ifo Current Conditions for January 2026: 85.7 (86.5 forecast; 85.6 previous)
- Germany Ifo Expectations for January 2026: 89.5 (90.5 forecast; 89.7 previous)
- U.S. Durable Goods Orders for November 2025: 5.3% m/m (1.1% m/m forecast; -2.2% m/m previous)
- U.S. Core Durable Goods Orders for November 2025: 0.5% m/m (0.5% m/m forecast; 0.2% m/m previous)
- U.S. Chicago Fed National Activity Index for November 2025: -0.04 (-0.4 forecast; -0.42 previous)
- U.S. Dallas Fed Manufacturing Index for January 2026: -1.2 (-6.0 forecast; -10.9 previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Monday’s session showcased sharp divergences across asset classes as currency intervention speculation collided with severe winter weather impacts and anticipation of a packed earnings calendar.
Gold emerged as the session’s strongest performer, surging 1.23% to close around $5,055 per ounce and breaching the psychologically significant $5,000 level for the first time. The precious metal’s advance appeared to reflect multiple supportive factors, including safe-haven demand tied to dollar weakness and currency intervention speculation, geopolitical tensions, and positioning ahead of Wednesday’s Federal Reserve meeting. Gold’s breakout to new all-time highs came despite the absence of direct gold-specific catalysts, suggesting broad-based appetite for alternative stores of value amid ongoing concerns about monetary policy independence.
U.S. equities posted solid gains, with the S&P 500 climbing 0.71% to close around 6,952, extending January’s advance. The index rallied steadily through the session, possibly benefiting from sector rotation into energy and utility stocks as natural gas prices soared above $7 per million British thermal units for the first time since late 2022. Power suppliers gained sharply on expectations of elevated electricity demand during the extreme cold snap, while broader market sentiment appeared supported by optimism heading into the week’s high-stakes earnings reports from megacap technology companies including Meta, Microsoft, Tesla, and Apple. The rally came despite growing debate about artificial intelligence infrastructure spending returns, with markets seemingly willing to look past valuation concerns ahead of concrete earnings data.
Bitcoin declined 1.99% to trade near $87,458, falling at the open and extending recent weakness. The cryptocurrency’s decline came despite dollar weakness that typically supports digital assets, possibly reflecting profit-taking after recent volatility or concerns about risk appetite heading into a busy week of earnings reports and the Federal Reserve meeting. The weak start suggested overnight positioning adjustments, with Bitcoin failing to benefit from the broader currency market turmoil that lifted gold to new highs.
Oil declined 0.49% to settle around $60.72 per barrel despite supportive factors from the winter storm. The modest weakness likely reflected profit-taking after recent gains or concerns about demand destruction from the extreme weather disrupting economic activity, even as the cold snap knocked significant natural gas production offline and supported energy sector equities.
Treasury yields declined modestly, with the 10-year yield falling 0.54% to approximately 4.21%. The bond market move likely reflected safe-haven demand amid currency market volatility and positioning ahead of Wednesday’s Fed decision, where policymakers are widely expected to hold rates steady but may signal the timing of future cuts. The yield decline came despite continued questions about the trajectory of Federal Reserve policy and lingering tensions over central bank independence.
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FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Majors Forex Chart by TradingView
The U.S. dollar experienced choppy and volatile trading on Monday, ultimately closing as the worst-performing major currency as speculation about coordinated U.S.-Japan currency intervention dominated market psychology.
During the Asian session, the dollar opened with an initial push lower against the major currencies, extending weakness that began late Friday after reports surfaced that the Federal Reserve Bank of New York had conducted rate checks on the yen. These inquiries, which involve asking dealers about current exchange rate levels, are widely interpreted as preparatory steps before official intervention. However, after this opening decline, the dollar rebounded and stabilized through the rest of the Asian session as traders likely assessed the probability of actual intervention versus routine monitoring. The yen’s sharp Friday rally appeared to prompt some profit-taking, allowing the greenback to recover from its lows.
The London session maintained the dollar’s stabilization seen in late Asian trading. German business climate data disappointed expectations, with the Ifo index falling to 87.6 versus 88.4 forecast and both current conditions and expectations components missing estimates. Rather than supporting the dollar through relative economic divergence, the weak European data generated limited immediate currency reaction, with markets appearing to await developments during the U.S. session. Through the morning London hours, the dollar traded in a relatively narrow range against most major currencies, suggesting traders were positioned cautiously ahead of potential headlines regarding currency intervention or comments from Japanese or U.S. officials.
The U.S. session brought renewed dollar selling pressure despite stronger-than-expected durable goods data. After the U.S. open, the dollar fell against the major currencies, with the move likely reflecting a combination of positioning adjustments and ongoing concerns about coordinated intervention. However, the dollar eventually found a bottom approximately an hour after U.S. equities opened, possibly as traders assessed that no immediate intervention action appeared forthcoming. From this intraday low, the greenback rebounded slightly through the afternoon, though it remained under pressure. The currency intervention speculation appeared to outweigh the positive U.S. manufacturing data and anticipation of Wednesday’s Fed decision. The dollar’s intraday volatility likely reflected several converging factors including the unwinding of yen carry trades as speculators covered short positions, concerns that coordinated intervention could involve up to $100 billion in dollar sales based on Japan’s 2024 intervention precedent, and recent questions about dollar reserve currency status and central bank independence.
Upcoming Potential Catalysts on the Economic Calendar
- Australia NAB Business Confidence for December 2025 at 12:30 am GMT
- China Industrial Profits (YTD) for December 2025 at 1:30 am GMT
- New Zealand Credit Card Spending for December 2025 at 2:00 am GMT
- France Consumer Confidence for January 2026 at 7:45 am GMT
- U.S. ADP Employment Change Weekly for January 10, 2026 at 1:15 pm GMT
- Canada Wholesale Sales Prel for December 2025 at 1:30 pm GMT
- U.S. House Price Index for November 2025 at 2:00 pm GMT
- U.S. S&P/Case-Shiller Home Price for November 2025 at 2:00 pm GMT
- U.S. Richmond Fed Manufacturing Index for January 2026 at 3:00 pm GMT
- CB U.S. Consumer Confidence for January 2026 at 3:00 pm GMT
- U.S. Dallas Fed Services Index for January 2026 at 3:30 pm GMT
- Euro area ECB President Lagarde Speech at 5:00 pm GMT
- U.S. Money Supply for December 2025 at 6:00 pm GMT
Tuesday’s calendar features the U.S. Consumer Confidence report at 3:00 pm GMT, which could provide insight into household sentiment at the start of 2026 amid ongoing debates about Federal Reserve independence and the approaching transition in Fed leadership. Home price indices released at 2:00 pm GMT will offer perspective on housing market momentum heading into the new year, though these backward-looking November readings may receive limited attention given the market’s focus on currency intervention speculation and Wednesday’s FOMC decision.
The session also includes ECB President Lagarde’s speech at 5:00 pm GMT, which will be closely monitored for any commentary on the recent currency market volatility and whether European policymakers view coordinated intervention efforts as potentially supportive or destabilizing for global financial conditions. Markets remain highly sensitive to any developments related to the yen intervention narrative, with traders watching for additional comments from Japanese or U.S. officials that could clarify whether Friday’s rate checks represent genuine preparation for action or simply routine market monitoring.
