Markets extended losses on Thursday as technology stocks led a broad selloff amid concerns over artificial intelligence spending returns, while geopolitical tensions with Iran pushed oil and gold sharply higher despite the Federal Reserve’s steady policy stance.
Check out the forex news and economic updates you may have missed in the latest trading session!
Forex News Headlines & Data:
- New Zealand Balance of Trade for December 2025: 0.05B (-0.18B forecast; -0.16B previous)
- New Zealand ANZ Business Confidence for January 2026: 64.1 (73.9 forecast; 73.6 previous)
- U.K. Car Production for December 2025: 17.7% y/y (6.7% y/y forecast; -14.3% y/y previous)
- Australia Export Prices for December 31, 2025: 3.2% q/q (-0.5% q/q forecast; -0.9% q/q previous)
- Australia Import Prices for December 31, 2025: 0.9% q/q (0.5% q/q forecast; -0.4% q/q previous)
- Japan Consumer Confidence for January 2026: 37.9 (37.6 forecast; 37.2 previous)
- Swiss Balance of Trade for December 2025: 3.0B (3.8B forecast; 3.0B previous)
- Euro area M3 Money Supply for December 2025: 2.8% (3.0% forecast; 3.0% previous)
- Euro area Loans to Households for December 2025: 3.0% y/y (3.0% y/y forecast; 2.9% y/y previous)
- Euro area Economic Sentiment for January 2026: 99.4 (97.5 forecast; 96.7 previous)
- Euro area Consumer Confidence for January 2026: -12.4 (-12.4 forecast; -13.1 previous)
- Euro area Consumer Inflation Expectations for January 2026: 24.1 (25.0 forecast; 26.7 previous)
- Canada Balance of Trade for November 2025: -2.2B (-0.6B forecast; -0.58B previous)
- Canada Average Weekly Earnings for November 2025: 2.5% y/y (2.1% y/y forecast; 2.2% y/y previous)
- U.S. Unit Labor Costs for September 30, 2025: -1.9% (-1.9% forecast; 1.0% previous)
- U.S. Initial Jobless Claims for January 24, 2026: 209.0k (205.0k forecast; 200.0k previous)
- U.S. Balance of Trade for November 2025: -56.8B (-37.0B forecast; -29.4B previous)
- U.S. Factory Orders for November 2025: 2.7% m/m (1.4% m/m forecast; -1.3% m/m previous)
- U.S. Wholesale Inventories for November 2025: 0.2% m/m (0.1% m/m forecast; 0.2% m/m previous)
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay – Chart Faster With TradingView
Thursday’s session reflected a risk-off environment as equity markets extended losses amid growing skepticism about the sustainability of artificial intelligence infrastructure spending, while geopolitical tensions provided support to commodities.
U.S. equities declined on the session, with the S&P 500 falling 0.36% to close near 6,964, extending losses for a second consecutive session. The Nasdaq Composite dropped 1.6% as technology stocks bore the brunt of selling pressure. Microsoft plunged more than 10% after reporting slowing cloud growth despite record-high AI spending, marking its worst daily performance since 2020. Tesla fell 1.2% after posting its first annual revenue decline in company history. Oracle slid 3.1% following the announcement of an AI-powered platform launch. In contrast, Meta surged nearly 9% after its sales outlook exceeded expectations, while IBM jumped 7.4% and Caterpillar rose 4.1% on stronger-than-expected earnings. The selloff appeared driven by mounting concerns about the timeline for returns on the hundreds of billions being invested in AI infrastructure, with traders questioning whether current valuations adequately account for monetization risks.
WTI crude oil posted the session’s strongest gains, rallying 3.06% to close around $65.10 per barrel. The sharp move higher correlated directly with President Trump’s escalating rhetoric toward Iran, warning that a U.S. naval armada is heading toward the Persian Gulf and threatening military strikes if Tehran fails to negotiate a nuclear non-proliferation deal. Brent crude topped $70 per barrel for the first time since September, reflecting market concerns about potential supply disruptions from Iran, which produces more than 3 million barrels daily and exports roughly 1.2-1.4 million barrels per day to China. The geopolitical risk premium injected into oil markets overshadowed any demand concerns related to the equity selloff.
Gold declined 0.54% to settle near $5,370, pulling back from early-session highs near $5,600 that marked a fresh record. The precious metal initially rallied sharply during Asian hours on the Iran tensions and dollar weakness before profit-taking emerged through London and U.S. trading hours. The pullback likely reflected position adjustments as traders assessed whether the geopolitical risk warranted sustaining the metal at record levels, particularly with the dollar showing resilience later in the session.
Bitcoin fell 5.55% to trade around $84,260, underperforming all major asset classes in a pronounced selloff. The cryptocurrency declined steadily throughout the session from Asian trading through the U.S. close with no direct crypto-specific catalysts to point to. The weakness possibly reflected broader risk-off sentiment in technology-adjacent assets, with the correlation to Nasdaq weakness appearing particularly pronounced.
Treasury yields declined 0.33% to approximately 4.23% on the 10-year note. Yields traded mostly sideways through Asian and early London sessions before dipping modestly through the U.S. afternoon, possibly reflecting safe-haven demand amid the equity selloff. The bond market’s relatively muted reaction despite the sharp stock declines suggested traders remain focused on the Federal Reserve’s patient stance and are not yet pricing increased recession risk. The yield move also came despite President Trump’s comments about naming a dovish Fed Chair, indicating bond markets are waiting for actual policy changes rather than reacting to political rhetoric.
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FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Majors – Chart Faster with TradingView
The U.S. dollar experienced a volatile and choppy session on Thursday, ultimately emerging as one of the weaker major currencies despite intraday reversals that saw the greenback touch session highs during the U.S. morning session.
During the Asian session, the dollar traded net lower against the major currencies and found a bottom ahead of the London open. The weakness appeared broad-based across currency pairs with no major regional data releases to point to as catalysts. The dollar’s decline possibly reflected continued positioning adjustments following Wednesday’s Federal Reserve meeting, where Powell signaled an extended pause to rate cuts despite dovish dissents. The yen showed relative strength during Asian hours, possibly benefiting from risk-off flows as equity futures pointed lower.
The London session brought a dollar rebound, with the greenback recovering against the major currencies through the morning hours before pulling back slightly ahead of the U.S. open. European economic data came in mixed, with euro area economic sentiment surprising to the upside at 99.4 versus 97.5 expected, while consumer inflation expectations fell more than forecast to 24.1 from 26.7 previously. The improving sentiment data appeared to provide modest support to the euro, limiting the dollar’s gains. UK car production data showed a sharp rebound, but had little immediate impact on sterling. The dollar’s recovery through London hours appeared to correlate with position squaring ahead of U.S. economic data releases rather than specific fundamental drivers.
The U.S. session opened with the dollar trading slightly lower before staging a sharp rally just after U.S. equities opened around 9:30 am ET. This rally proved short-lived, with the greenback capped and then pulling back through the afternoon. The morning U.S. data showed initial jobless claims rising to 209,000 versus 205,000 expected, while the trade deficit widened dramatically to $56.8 billion versus $37.0 billion forecast, nearly doubling from October’s revised reading. The massive trade gap widening reflected import volatility related to Trump administration tariff policies. Despite the weaker trade data that would typically pressure the dollar, the greenback’s intraday strength possibly reflected safe-haven flows as technology stocks sold off sharply. However, the dollar failed to sustain these gains, weakening into the close as President Trump’s Iran threats boosted commodity currencies and risk-off positioning favored the yen and franc.
At the Thursday close, the U.S. dollar was one of the worst performing currencies on the day after a very choppy, volatile and mostly sideways session. The dollar’s inability to capitalize on equity market weakness and worsening trade data suggested that the combination of dovish Fed dissents, Trump’s comments about appointing a rate-cutting Fed Chair, and geopolitical uncertainty outweighed any safe-haven demand for the greenback.
Upcoming Potential Catalysts on the Economic Calendar
- Japan Tokyo CPI for January 2026 at 11:30 pm GMT
- Japan Unemployment Rate for December 2025 at 11:30 pm GMT
- Japan Industrial Production Prel for December 2025 at 11:50 pm GMT
- Japan Retail Sales for December 2025 at 11:50 pm GMT
- Australia Private Sector & Housing Credit for December 2025 at 12:30 am GMT
- Australia PPI for December 31, 2025 at 12:30 am GMT
- Japan Housing Starts for December 2025 at 5:00 am GMT
- France GDP Growth RatePrel for December 31, 2025 at 6:30 am GMT
- U.K. Nationwide Housing Prices for January 2026 at 7:00 am GMT
- Swiss KOF Leading Indicators for January 2026 at 8:00 am GMT
- Germany Unemployment Rate for January 2026 at 8:55 am GMT
- Germany GDP Growth Rate Flash for December 31, 2025 at 9:00 am GMT
- U.K. Monetary Developments for December 2025 at 9:30 am GMT
- Euro area Unemployment Rate for December 2025 at 10:00 am GMT
- Euro area GDP Growth Rate Flash for December 31, 2025 at 10:00 am GMT
- Germany CPI Growth Rate Prel for January 2026 at 1:00 pm GMT
Friday’s calendar features a heavy slate of European fourth-quarter GDP releases, with flash estimates from Germany, France, and the euro area providing critical insight into whether the region’s economy maintained momentum into year-end. Germany’s data will be particularly closely watched given recent weakness in manufacturing surveys, with any downside surprise potentially weighing on the euro and reinforcing dovish ECB expectations.
UK housing price data from Nationwide could influence Bank of England rate cut expectations, particularly following recent softer inflation prints that have already pulled forward market pricing for BOE easing. In Asia, Japan’s Tokyo CPI serves as a leading indicator for national inflation and will be scrutinized for signs that price pressures remain sticky enough to support Bank of Japan hawkishness, while industrial production and retail sales data will help assess economic momentum heading into 2026.
With U.S. markets facing a relatively light data day, focus may remain on geopolitical developments surrounding Iran and any further commentary from President Trump regarding his Federal Reserve Chair nominee, which he indicated would be announced next week. Currency markets remain sensitive to shifts in relative central bank policy expectations, particularly as European data could either support or undermine the narrative that the Fed will remain more restrictive than its major counterparts in 2026.
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