EUR/USD fell marginally after the ECB left rates unchanged on Thursday, as expected, while downplaying recent dollar weakness and saying the inflation outlook remains stable despite trade and geopolitical uncertainties. Meanwhile, the pound tumbled after the BoE voted narrowly 5–4 to keep rates unchanged, while signalling that borrowing costs are likely to fall if the anticipated slowdown in inflation is sustained. ECB President Christine Lagarde said the decision to stand pat was unanimous, risks are balanced, and that dollar moves remain within a long-standing range though bank is monitoring. Separately, the ECB is exploring ways to widen access to euro liquidity for more countries to strengthen the euro’s international role, sources said. Bank of England Governor Andrew Bailey said that investors’ roughly 50-50 expectations for a cut next month were “not a bad place to be,” while striking an upbeat tone on the outlook. U.S President Donald Trump said Japanese Prime Minister Sanae Takaichi had his "total endorsement" ahead Sunday's elections, adding that they would meet March 19 at the White House. Treasury Secretary Scott Bessent said he would not support scrapping Canada tariffs, flagged uncertainty over China’s digital-asset ambitions, left open legal questions should Trump disagree with Fed nominee Kevin Warsh's policy, and said Russia sanctions hinge on Ukraine talks. Ukraine President Volodymyr Zelenskiy said Russia peace talks backed by the U.S. will continue soon after a second round, adding Kyiv raised further POW swaps. Bank of Canada Governor Tiff Macklem said adapting Canada’s economy to U.S. tariffs, slower population growth and artificial intelligence will take years and could be painful. The dollar pulled back from a near two-week high as U.S. tech shares slid and Treasury yields fell following a surprise rise in weekly jobless claims and a five-year low in job openings.

EUR/USD edged down toward 1.18 as risk appetite faded, with a daily doji and declining RSI signalling ongoing bearish consolidation, even as lower Treasury yields and short-covering support.

GBP/USD fell to near 1.3550 after the BoE’s narrow 5–4 hold signalled a dovish tilt, pulling forward cut odds and leaving bearish technicals in control for a possible test of the November lows.

USD/JPY printed an indecisive doji above the cloud top after touching a near two-week high of 157.34, with options markets still reflecting a mildly bullish bias heading into Japan’s weekend elections.

AUD/USD dipped to around 0.6940 amid risk-off flows and weaker metals after Rio Tinto ended takeover talks with Glencore, before a softer dollar later left technical signals broadly bullish.

Bitcoin tumbled nearly 9% to its lowest level since November.

Treasury yields were down 6 to 8 basis points as the curve steepened. The 2s-10s curve was up marginally to a four-year high near 72.1bp.

The S&P 500 slid 1.14% with futures looking to fill a December price gap near 6800.

WTI oil fell almost 3% after the U.S. and Iran agreed to hold talks in Oman on Friday.

Gold rose 2%, silver dropped 13% and copper eased 0.4%. Heading toward the close: EUR/USD -0.08%, USD/JPY +0.02%, GBP/USD -0.82%, AUD/USD -0.46%, DXY +0.19%, EUR/JPY -0.10%, GBP/JPY -0.79%, AUD/JPY -0.47%.(Editing by Burton Frierson Reporting by Robert Fullem)

MUFG Research reviews the February's BoE decision.

"The BoE held Bank Rate at 3.75% in an unexpectedly tight 5–4 vote that clearly opens the door to a cut at the next meeting in March. Policymakers are notably more confident in the disinflation process with the updated projections showing inflation returning to target swiftly in Q2 and then remaining there or thereabouts. Governor Bailey will still remain the key swing voter on a divided MPC. But external member Mann has also now emerged as an additional wildcard who could also tilt the balance, further raising the likelihood of a cut in March," MUFG notes.

"Focus will be firmly on the two sets of labour market data released before the next policy announcement. We maintain our call for a terminal rate of 3.25%, with risks tilted towards an extra cut this year," MUFG adds.

• NY opened near 0.6970 after AUD/USD traded 0.7007 overnight, choppy trade early NY

• Sellers emerged as risk-off intensified; US$ firmed & US Treasuries rallied

• Gold , silver & copper fell which reinforced US$ buying

• AUD/JPY drop below 108.70 & equity added to the risk-off sentiment

• AUD/USD fell below the 10-DMA, hit a 3-session low of 0.6940 then bounced

• US$ softened a bit & USD/CNH fell to 6.9338; helped AUD/USD near 0.6975 late

• AUD/USD traded down-0.36% in NY's afternoon but techs still leaned bullish

• Rising monthly RSI, consolidation of recent gains are bullish tech signals

• US February University of Michigan survey is a data risk in NY Friday
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Credit Agricole CIB Research previews the US January jobs report on Friday.

"We expect NFP to rise by +90k, accelerating from December’s print of +50k, which would result in the three-month moving average jumping back up to +65k. This would be above where we see the breakeven pace, which has dropped sharply this year given a drastic shift in immigration policies.

"With our expectation of solid job gains, we look for the unemployment rate to hold steady at 4.4%. This would remain slightly down from November’s print of 4.5%, which we think may represent the peak for the cycle

(Corrects typo in headline) Sterling faces a challenging climb in the near term as a surprisingly divided Bank of England suggests a faster pivot toward monetary easing than markets had previously priced.

While the BoE opted to leave interest rates steady, the 5-4 vote split caught traders off guard, revealing a narrow margin of support for the hold and a significant faction already leaning toward cuts.

Following the decision, several BoE members noted that while inflation remains a concern, the restrictive nature of current rates is weighing more heavily on economic momentum. This shift has led markets to pull forward rate cut expectations.

Investors are now eyeing March for the bank's next move, with the odds of a 25bp cut next month hovering near 50%. This dovish tilt has stripped away some of the higher-for-longer premium that had been supporting sterling throughout the winter.

Simultaneously, the Fed and the BoE appear to be traveling a remarkably similar road. Both central banks are navigating the delicate final mile of inflation normalization while guarding against a hard landing. As both institutions appear to be on a synchronized easing cycle, the interest rate differentials that usually drive volatility for the pair are flattening. This policy convergence is likely to keep GBP/USD anchored near its current range.

While the dollar faces its own headwinds, the BoE's newfound dovishness should effectively cap the pound at last week's high near 1.3867, preventing a breakout even if risk appetite remains firm.

Despite the pullback from the Jan. 27 high at 1.3867, bulls retain the upper hand while above 1.3453, the 50% Fib of 1.3039-1.3867. A move below 1.3453 may see a further retracement to late-November lows by 1.30.
Sterling Chart:


(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

ANZ Research expects a tactical USD upside during the month of February.

"The DXY Index has rebounded modestly and recovered most of its decline seen in January.

We expect a mild recovery in the USD this month. US economic fundamentals are improving, with recent positive surprises closing the gap with global growth, while short positions versus the EUR (an anti-USD proxy) have reached extremes...Better US consumption and activity data may boost the USD in the short term, given its attractive carry.," ANZ notes. 

"Seasonal trends also favour the USD in February," ANZ adds.

Goldman Sachs Research assess the balance of risks into Japan's snap elections on February 8.

"We agree that there looks to be limited scope for immediate USD/JPY upside following the election, but less because we see little room for further repricing on the fiscal outlook (especially over time)...

"Overall, we do not think current polling outcomes are fully priced, and the Yen would likely already be weaker if not for the risk of intervention. We continue to see the risks to our USD/JPY forecast path as skewed to the upside," GS adds. 

• AUD/USD rallied to 0.7007 in Asia, sellers emerged however,pair turned lower

• 0.6959 then traded, NY opened near 0.6980, AUD/USD was down -0.20% early NY

• Drops in gold , silver , copper helped sink the pair

• Broad-based US$ buying contributed to AUD/USD's trading lower

• The pair hovers just below the 10-DMA and daily RSI is falling

• Monthly RSI is rising however and AUD/USD is consolidating recent gains

• US weekly & continuing jobless claims are data risks in NY's morning
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)

• Mounting yen risks are reflected in the FX options market

• USD/JPY's rise on Wednesday closed above the daily cloud top, now at 156.36

• It also finished above 156.64 Fibo, a 61.8% retrace of the 159.45 to 152.10 (January) drop

• Spot has headed higher from 156.69 to 157.34, on Thursday, according to EBS data

• A decisive win for Japan PM Takaichi may be best scenario for bonds, yen

• Also, FX traders should be beware of intervention

• USD/JPY and EUR/JPY tend to move in tandem, log correlations are high above +0.5

Correlation Chart


Daily Chart


Correlation Chart


Correlation Chart


Daily Chart


Correlation Chart


Daily Chart


(Martin Miller is a Reuters market analyst. The views expressed are his own)

• U.S.-listed shares of gold and silver miners down premarket, tracking falling prices of the metals [GOL/]

• Spot gold down 0.9% at $4,917.61/ounce, retreating from a near one-week high hit earlier in the session

• Spot silver down 9.3% at $79.88/ounce, after tumbling as much as 15% earlier

• Gold and silver prices fell sharply in a broader market selloff, as the U.S. dollar advanced to a near two-week high and U.S.-China trade tensions showed signs of easing

• Top miners Newmont and Barrick Mining

down 2.6% and 1.6%, respectively

• South African miners Gold Fields , Sibanye Stillwater , AngloGold Ashanti and Harmony Gold

decline between 1.9% and 3.6%

• Silver miners Hecla Mining down 4.6% and Coeur Mining falls 4.4%

• Canadian miners Endeavour Silver falls 5.6%, Silvercorp Metals down 4.4%, Agnico Eagle Mines dips 2.3% and Kinross Gold down 2.5%

(Reporting by Pooja Menon in Bengaluru)

• GBP remains on the back foot as political risks start to price in more meaningfully

• Growing talk over a potential leadership challenge for PM Starmer amid the Mandelson scandal

• The currency came under pressure during PMQs yesterday, prompting EUR/GBP to break higher

• Clear that positioning is leaning for further topside with the door opening for a test of the high-0.87s

• FX options flash GBP stress as UK PM faces leadership threat

• The Feb 4 low at 0.8613 now looks like a short-term base, with dip demand likely to remain strong

• For now, the bias stays on the topside while headline risk remains elevated
EURGBP hourly chart


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

• Cable falls to 1.3609 as risk aversion weighs on the risk-sensitive pound

• 1.3609 is the lowest level since Jan 23 (USD/JPY rate checks from NY Fed that day)

• Increasing pressure on UK PM Starmer over Mandelson is also negative for GBP

• 1.3642 was Wednesday low. 1.3567 (Jan 6 high) is a support point below 1.3600

• BoE is expected to keep its policy rate at 3.75% at 1200 GMT, by 7-2 or 6-3 vote

• Fed's Cook says it's time to 'wait and see' on rates. U.S. inflation may be heating up

GBPUSD


(Robert Howard is a Reuters market analyst. The views expressed are his own)

• German industrial orders boomed 7.8% mm in December

• Big surprise (10%) as orders were expected to fall by 2.2%

• Dec boom in orders follows November's 5.6% rise

• EUR/USD consolidating after rise to 1.2084 in Jan became stretched

• Rise above peak 20-Day Bollingers followed by return toward their md-point

• Consolidation should be followed by a further rise - trend firmly higher

• The dollar drop is beginning to look interesting

• *

EURUSD


German industrial orders


(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• FX options expire at 10-am New York/15.00 GMT on Thursday February 5

• EUR/USD: 1.1725-35 (2BLN), 1.1800 (2.3BLN), 1.1825-30 (1.7BLN)

• 1.1835-40 (550M), 1.1875-80 (785M), 1.1900 (373M). USD/CHF: 0.7750 (285M)

• EUR/GBP: 0.8650 (573M), 0.8700 (226M)

• GBP/USD:1.3490-1.3500 (797M), 1.3650 (157M), 1.3705 (230M)

• AUD/USD: 0.6950 (426M), 0.7000 (501M), 0.7035-45 (348M)

• NZD/USD: 0.5910 (400M)

• CAD: 1.3630 (196M), 1.3640-50 (467M), 1.3675 (550M), 1.3790-1.3800 (530M)

• USD/JPY: 156.00 (926M), 156.15-25 (685M), 158.00-15 (630M), 158.50 (980M)

• EUR/JPY: 185.65 (390M). AUD/JPY: 105.50 (600M)

• Options wrap - Cen-bank threat, USD alert, EUR gains, JPY risk (Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/CNH loses traction, slips to 6.9447 from 6.9477

• Could fall back into Bollinger downtrend channel 6.9420

• Tentatively retreats as USD/JPY momentum peters out

• Fear of intervention may be taming bearish-yen election bets

• SSEC extends to -1.2% as regional equities reel on Wall St cue

• Gold, silver declines resume, weighing on investor sentiment
CNH


(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• AUD/USD -0.4% Thur as commodities encounter significant headwinds in Asia

• Affirmation of U.S.-Iran talks proceeding Fri sent Oil prices down over 2%

• Metals following suit, Gold -2.7%, silver -14.7%, Shanghai copper -3.5%

• AU Dec trade balance reveals continued export growth, goods surplus 3.37 bln

• Fed's Cook will focus on inflation, underscores lack of FFR policy clarity

• U.S. Dec JOLTS update (poll 7.2 mln) & jobless claims (poll 212k) due Thur

• Range Asia 0.69585-0.7007, support 0.6970 0.6905 0.6660, resistance 0.7158
Shanghai Copper Daily 21-DMA


AUD Hourly Bollinger Study


Gold Daily 21-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Cable heavy in Asia after push down to 1.3642 yesterday, Asia 1.3630-55

• Not looking to go anywhere soon ahead of BoE policy announcement

• BoE seen on hold pending clearer picture on inflation

• Recent data suggest UK economy not that bad as '26-start

• GBP/USD resistance from 1.3648 hourly Ichimoku tenkan, cloud 1.3669-86 above

• Descending 100-HMA near cloud top at 1.3696, still ascending 200-HMA 1.3720

• Support from 1.3624 low Monday, 1.3600/1.3594 daily Ichimoku kijun below key

• GBP sales vs EUR yesterday too, 0.8649-52 in Asia after rally to 0.8648 o/n

• Holding for now in area of gradually ascending 200-DMA at 0.8652

• Daily Ichimoku tenkan 0.8664 above, kijun 0.8679, to help cap

• Large option expiries today between 0.8600-50, some above on 0.87 handle

• Support from 0.8648 100-HMA, hourly Ichimoku cloud 0.8633-47 below

• GBP/JPY in pull-back mode, 214.23 to 213.73 in Asia, high yesterday 215.00

• 215.00 high yesterday best since 215.89 high of July 2008

• Related comments , , , also
GBP/USD:


EUR/GBP:


GBP/JPY:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD +0.1% Thur as Dec trade balance data shows continued export strength

• AU dec balance on goods +3.37 bln (poll +3.25 bln), exports increased 1.0%

• Fed's Cook will focus on inflation, underscores lack of FFR policy clarity

• Evolving U.S.-Iran crisis delivering short term geopolitical uncertainty

• AUD short term support near lower hourly Bollinger band 0.6970-75 zone

• U.S. Dec JOLTS update (poll 7.2 mln) & jobless claims (poll 212k) due Thur

• Range Asia 0.6993-0.7005, support 0.6970 0.6905 0.6660, resistance 0.7158
AUD Hourly Bollinger Study & DXY Daily 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY sees decisive break above its 154.18-156.35 daily Ichimoku cloud

• Musings about Trump Fed nominee Warsh, Japan elections-Takaichi win factors

• USD/JPY 156.81-94 EBS in Asia, follows 155.70 to 156.94 surge yesterday

• Support now seen from 156.70 hourly Ichimoku tenkan, kijun 156.32 below

• Underlining support now at daily cloud

• Resistance from 157.00 area, threat of FX intervention seen higher again

• Some massive, large option expiries in area today, to help contain spot?

• 155.00 $1.1 bln, 156.00-25 $1.6 bln, 158.00 $451 mln, 158.50 $980 mln

• Large expiries tomorrow too at 156.00 and 157.00 strikes

• Good demand from Japanese importers, others today at Gotobi Tokyo fix

• Takaichi comments highlighting benefits of weak yen still reverberating

• Most polls suggest Takaichi/LDP to win back majority in Lower House

• Likely portent for more expansionary policies, weaker yen as per Abenomics?

• Related comments , , ,

• Also , on US economic data

• US markets , , ,

• On Fed/rates , , ,

• And , , for more click on [FXBUZ]

USD/JPY:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research answers some of the questions on the USD outlook. We will provide some of theses FAQs over the coming days. Pls find here for another Q&A. 

 Is There a Risk of a More Rapid USD Decline?

"This is not our base case, and would view it more as a tail risk at this stage. We continue to forecast EURUSD reaching 1.25 by H2 2027; or roughly 5% from current levels. Such a move would be considered gradual, and even on the low-end over a 2-year period. And while the dollar appears to be serving as the so-called "release valve" among US assets (with US equities and US Treasuries still concurrently supported), we would also underscore that the US economy remains on solid (if not strong) footing overall," BofA notes.

"For the global economy ex-US, a large real depreciation of the dollar vis-à-vis other currencies would be a recessionary shock. While some economies with strong momentum could withstand it well, most developed economies would not emerge unscathed. With a general equilibrium view, weaker global ex-US growth and the subsequent monetary policy easing amid deflationary pressures would give a floor. In addition, a disorderly depreciation is not in the interest of anyone, neither the US nor the rest of the world," BofA adds.

• AUD/USD -0.7% from Wed 0.7043 high as UST yields & USD move higher

• Markets unsure of Warsh impact on Fed, Trump reiterates lower rates incoming

• Escalating U.S.-Iran crisis driving short term geopolitical uncertainty

• AU Dec trade data due Thur, Reuters poll: balance on goods +3.25 bln

• AUD supported near lower hourly Bollinger band, likely return to 0.7020 area

• Overnight range 0.6972-0.7043, support 0.6905 0.6660, resistance 0.7158
AUD Hourly Bollinger Study & Daily DXY 55-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• GBP$ soft in NY afternoon trade, -0.4% at 1.3645; NorAm range 1.3729-1.3643

• USD higher amid Tech selloff, broad risk unwind; precious metals reverse early rise

• BoE rate decision Thursday, no change expected, vote and guidance in focus

• Rtrs consensus f/c for 7-2 vote; more cut votes, dovish Bailey guidance may sink pound

• On flip side a more hawkish vote amid pay growth may stall cut pushing GBP higher

• GBP$ res 1.3700 psychological lvl, 1.3733 Wednesday high, 1.3803 upper 30-d Bolli

• Supt 1.3624 daily low Feb 2, 1.3594 daily base line, 1.3540 rising 30-DMA

GBP Chart:


(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

UniCredit Research previews the February ECB policy meeting on Thursday. 

"The ECB will almost certainly leave interest rates unchanged this week. Information available since the December meeting broadly confirms the central bank’s baseline scenario. Economic activity and the labour market continue to show resilience to the highly uncertain geopolitical environment, as do financial markets," UniCredit notes.

"A stronger euro is unlikely to pose a major threat to the ECB’s baseline scenario. However, data dependency and a meeting-by-meeting approach provide the central bank with enough flexibility to act swiftly if medium-term price stability were jeopardized. We confirm our view that the deposit rate will remain at 2% until well into 2027," UniCredit adds.

• NY opened near 0.7030 after AUD/USD 0.7043 overnight, pair lifted early

• 0.7035 traded but bulls ran out of steam, the pair began falling

• US$ buying persisted in NY, USD/CNH rallied up to 6.9432

• Gold , silver erased gains, turned lower, reinforced US$ buying

• AUD/USD turned lower on the session, neared the 10-DMA, hit 0.6972

• Daily RSI turned downward & a daily inverted hammer candle formed
audusd


(Christopher Romano is a Reuters market analyst. The views expressed are his own)