The US dollar fell on Thursday after President Donald Trump signed an agreement to end the government shutdown, while the Japanese yen dropped to a record low against the euro following comments from Japan’s new prime minister, Sanae Takaichi, who said she prefers the Bank of Japan to take a slower approach to raising interest rates.

At the same time, the British pound briefly touched a session low before partially recovering, after a report showed that the UK economy barely expanded in the third quarter.

The Australian dollar, meanwhile, reached its highest level in two weeks, supported by official data showing a sharp decline in unemployment from a four-year high, reducing the likelihood of further interest-rate cuts.

Currency markets brace for volatility as delayed data returns

Markets are expected to see increased volatility in the coming days as a series of delayed US economic releases resumes following the end of the prolonged government shutdown late Wednesday. However, the White House said that the October jobs report and consumer-price index may not be released at all.

Michael Brown, chief market strategist at Pepperstone, said: “For now, markets are correctly focused on the fact that resolving the congressional gridlock removes a significant layer of uncertainty and lifts a major drag on growth.”

Yen hits historic lows against the euro and dollar

The Japanese yen hit a record low of 179.805 against the euro on Thursday before recovering slightly to 179.51. It also weakened to 155.02 against the US dollar, coming close to Wednesday’s low of 155.05, a level last seen in early February, before trading at 154.53 in the European session as the dollar slipped 0.17 percent on the day.

Prime Minister Takaichi said on Wednesday that her administration prefers interest rates to remain low and emphasized the need for close coordination with the Bank of Japan.

That same day, Finance Minister Satsuki Katayama issued another verbal warning against the yen’s rapid and excessive weakness as it approached 155 per dollar, pointing to “unilateral and fast movements in the foreign-exchange market.”

Weak yen may force the Bank of Japan to act

The yen’s weakness could push the Bank of Japan to raise interest rates next month. Traders are pricing in a 22 percent probability of a quarter-point rate increase in December, rising to 43 percent by January.

Norihiro Yamaguchi, economist at Oxford Economics, said: “The yen’s weakness likely heightens government concern because it risks triggering a renewed surge in food and energy inflation.”

He added that “the exchange rate has become a decisive factor in the government’s political survival,” noting that to ease the pressure on the yen, the government may eventually have to accept a rate hike by the Bank of Japan.

Pound fluctuates as weak growth data emerges

In Europe, the British pound rose 0.24 percent to 1.3164 dollars after briefly falling to 1.3102 dollars following official data showing that the UK economy barely grew in the third quarter, partly due to a cyberattack in September that disrupted economic activity.

The data confirmed a slowdown in economic momentum ahead of next week’s budget, which finance minister Rachel Reeves is expected to accompany with a series of tax increases.

The euro trimmed overnight losses and rose 0.3 percent against the dollar to 1.1627 dollars, its highest level since late October.

Australian dollar supported by strong labor market

In Australia, traders cut the probability of a December rate cut to just 6 percent after strong data earlier this week.

Thursday’s labor-market report showed a significant increase in employment in October, driven by gains in full-time jobs, easing concerns about a severe slowdown in the labor market.

Gold prices rose in European trading on Thursday, extending gains for the fifth consecutive session and reaching a three-week high, supported by the current decline in the US dollar, which remains under pressure from expectations of a potential interest-rate cut by the Federal Reserve in December.

President Donald Trump signed a bill to reopen the government, a move that will revive the flow of official economic data and provide clearer evidence regarding the Fed’s policy path.

Price Overview

• Gold prices today: Spot gold rose by 1.1 percent to 4,239.42 dollars, the highest level since 21 October, from an opening price of 4,195.49 dollars, after touching an intraday low of 4,180.12 dollars.

• At Tuesday’s settlement, gold gained 1.65 percent, marking a fourth consecutive daily increase, supported by strong safe-haven demand.

US Dollar

The US Dollar Index fell by 0.4 percent, hitting a two-week low at 99.20 points, reflecting broad weakness in the US currency against a basket of major counterparts.

This decline followed President Donald Trump’s signature on legislation ending the longest government shutdown in US history, bringing an end to political gridlock in Washington.

The development has eased concerns about slowing economic activity and opened the door for the return of regular government data releases, restoring confidence in the markets.

US Interest Rates

• Federal Reserve governor Steven Miran said on Monday that a 50-basis-point rate cut would be appropriate for December, noting that inflation is easing while unemployment is rising.

• According to CME’s FedWatch tool, market pricing currently assigns a 67 percent probability to a 25-basis-point rate cut in December, while the probability of no change remains at 33 percent.

• To reassess these probabilities, investors are closely monitoring remarks from Federal Reserve officials and anticipating the resumption of government economic data as soon as possible.

Outlook for Gold

Analysts at ANZ said in a note that the likelihood of softer economic data following the US government shutdown has helped push gold higher, adding that this will likely support continued central-bank demand.

They added that supportive policy measures, economic uncertainty, and limited investment alternatives will sustain gold demand from retail investors and strategic allocations.

SPDR Fund

Holdings in the SPDR Gold Trust, the world’s largest gold-backed ETF, rose by 0.28 metric tons on Wednesday, marking a second consecutive daily increase and lifting total holdings to 1,046.64 metric tons, the highest level since 24 October.

The British pound fell in the European market on Thursday against a basket of major currencies, extending its losses for the third consecutive session against the US dollar, as the American currency strengthened following President Trump’s signing of a bill to end the longest government shutdown in US history.

After the release of downbeat labor-market data in the United Kingdom, the probability of a Bank of England rate cut in December increased. To reassess those expectations, investors are now awaiting key figures on UK economic growth due later today.

Price Overview

• GBP/USD exchange rate: The pound fell by about 0.2 percent to 1.3111 dollars, down from an opening price of 1.3133 dollars, after recording an intraday high at 1.3134 dollars.

• On Wednesday, the pound lost roughly 0.15 percent against the dollar, marking a second straight day of declines amid ongoing correction and profit-taking from the two-week high of 1.3191 dollars.

US Dollar

The US dollar index rose by 0.1 percent on Thursday, maintaining gains for a second session and reflecting continued strength in the American currency against major and minor peers.

The rise came after President Donald Trump signed legislation ending the longest government shutdown in US history, effectively breaking the political deadlock in Washington.

This development eases concerns about a potential economic slowdown in the United States and paves the way for the resumption of regular government data releases, restoring confidence to financial markets.

UK Interest Rates

• Data released this week in the United Kingdom showed a rise in monthly jobless claims, while the unemployment rate hit its worst level since April 2021, developments that ease inflationary pressure on Bank of England policymakers.

• Following these figures, market pricing for a 25-basis-point rate cut in December increased from 60 percent to 80 percent.

UK Economic Growth

To reassess those expectations, investors are awaiting important data from London later today, including the quarterly GDP reading for the third quarter, the monthly GDP reading for September, and additional figures on UK manufacturing output.

Outlook for the British Pound

At Economies.com, we expect that if the upcoming data proves less hawkish than markets anticipate, the probability of a December rate cut will rise further, a development that would place additional downward pressure on the pound.

The Australian dollar strengthened in the European market on Thursday against a basket of major currencies, extending gains for the second consecutive session against the US dollar and hitting a two-week high after the release of strong Australian labor market data.

The figures showed persistently tight labor conditions, adding pressure on the Reserve Bank of Australia (RBA) and reducing expectations for a rate cut in December.

Price Overview

• **AUD/USD exchange rate:** The Australian dollar rose about 0.4% to **0.6565**, its highest level since October 24, from an opening price of **0.6541**, after touching an intraday low of **0.6533**.

• On Wednesday, the Australian dollar gained more than 0.2% against its US counterpart, marking its third daily rise in the past four sessions amid improved risk appetite in global markets.

Australian Labor Market

Data from the Australian Bureau of Statistics on Thursday showed that **net employment jumped by 42.2 thousand in October**, the fastest pace since April, easily beating market expectations for a gain of 20 thousand. September’s employment figure was revised down from 14.9 thousand to 12.8 thousand.

The report also showed that the **unemployment rate fell to 4.3%**, below market expectations of 4.4%, after recording 4.5% in September.

These results confirm that Australia’s labor market remains tight, reinforcing the case for the RBA to maintain its restrictive monetary policy stance well into 2026.

Australian Interest Rates

• Following the data release, market pricing for a **25-basis-point rate cut in December** fell from **35% to 15%**.

• Investors now await further data on inflation, employment, and wage growth to reassess the outlook for monetary policy in Australia.