Forex week in review 44/2026: three central bank holds, two Fed dissents and a gold sell-off

This was the busiest central bank week of the autumn: the Federal Reserve on Wednesday, the European Central Bank on Thursday and the Bank of Japan on Friday. All three left rates unchanged, which might suggest a quiet week. It was not. The Fed vote showed two officials wanting to hike immediately, the ECB warned about upside risks to inflation, and the BoJ said for the first time that underlying inflation had reached its target. In between, US growth and inflation data came in strong, and on Friday a tech-stock rout dragged gold to its lowest level in a year.

Weekly currency figures below compare the Friday 30 October close with the Friday 23 October close, as reported by RTTNews. Gold figures are from FinanceFeeds and CNBC; policy decisions are from the central banks’ own statements; US data are from the Bureau of Economic Analysis.

Where we left off

The previous week, Houthi attacks on Saudi Arabia had pushed Brent crude up 6.24% to $116.72. Currencies had sorted themselves by which central bank seemed most likely to hike: the Australian dollar and sterling led, the euro lagged, and the yen rallied on a tech selloff. Gold had fallen through $4,000. CME FedWatch was pricing a 92% chance that the Fed would hold this week and about a 78% chance of a December hike. See last week’s recap.

Day by day

Monday 26 and Tuesday 27 October

The week began calmly. Crude oil prices and bond yields eased on Monday, according to RTTNews, and EUR/USD made its weekly high of 1.1228 while USD/JPY set its weekly low of 156.64. The Fed’s two-day meeting started on Tuesday. AUD/USD made its weekly low of 0.7009 on Tuesday.

Wednesday 28 October: the Fed holds, with dissent

The FOMC kept the federal funds target range at 3.75–4.00%, as widely expected. But the vote was 10–2: Governor Lisa Cook and Cleveland Fed president Beth Hammack both preferred to raise rates by a quarter point. The statement said inflation remains elevated, that economic activity is expanding at a strong pace, and that the Committee would use more information to set a policy stance that ensures a timely return of inflation to its 2% goal.

That is what traders call a hawkish hold. The decision itself was no change, but the statement and the dissents pointed towards tighter policy ahead. The dollar index rose to its weekly high of 102.49 on Wednesday, USD/JPY hit 158.36 and GBP/USD made its weekly low of 1.3271, according to RTTNews. Gold slipped as markets assessed Fed chair Kevin Warsh’s comments, according to CNBC.

Australian consumer price data released during the week showed headline inflation of 4.3% in the year to September, above the 4.2% consensus, and third-quarter trimmed-mean inflation of 3.7%, above the 3.6% forecast, according to FXStreet. Pricing for an RBA hike on 3 November jumped; FXStreet cited the ASX rate tracker at nearly 80%, up from 62% before the data.

Thursday 29 October: US data and the ECB

The Bureau of Economic Analysis reported that US real GDP grew at an annual rate of 3.4% in the third quarter, up from 2.2% in the second quarter, with investment, consumer spending and government spending all contributing. RTTNews put the consensus at 3.2%. The September personal income and outlays report showed the PCE price index up 0.5% on the month and 3.6% on the year, from 3.4% in August. Core PCE rose 0.3% on the month and 3.1% on the year. RTTNews said both were in line with expectations. Consumer spending rose 0.5% on the month.

In Frankfurt, the ECB kept its three key interest rates unchanged, leaving the deposit facility rate at 2.50%. President Christine Lagarde said in the press conference that the decision was unanimous, although some members had discussed a hike. The monetary policy statement noted that euro area inflation had risen to 3.8% in September, with energy inflation at 18.9%, while core inflation was 2.3%. It said risks to growth were skewed to the downside, citing the Middle East conflict, Russia’s war against Ukraine and energy supply disruption, and risks to inflation were skewed to the upside. Lagarde said 10-year sovereign yields had risen about 35 basis points since the September projections. Euro area third-quarter GDP grew 0.4% on the quarter, above the 0.2% forecast, according to RTTNews.

EUR/USD made its weekly low of 1.1105 on Thursday, and AUD/USD its high of 0.7070. RTTNews said the ECB pause weighed on the euro.

Friday 30 October: the BoJ, and a rout in tech

The Bank of Japan held its policy rate at 1.25%. Board member Hajime Takata dissented, preferring a hike, according to FXStreet. The BoJ said underlying inflation had reached levels in line with its 2% target and saw a risk of overshooting it, and it said it would keep raising rates. It also decided to speed up sales of its exchange-traded fund holdings to about 860 billion yen a year from about 330 billion yen. Governor Kazuo Ueda said all members agreed underlying inflation had reached 2%, but stressed that the target had not yet been declared achieved. USD/JPY was little changed around 157.4, according to FXStreet. CNBC reported that Tokyo core inflation was above the BoJ’s 2% target in October.

Later in the day, technology shares sold off sharply. FinanceFeeds reported that Intel fell 28.6% after weak guidance, the S&P 500 dropped 1.82% and the Nasdaq 2.86%, and that Commerzbank cited margin-call liquidations. Spot gold fell to close at $3,875.19 an ounce, its lowest since October 2025, down 3.74% on the week and 7.22% in October, a second straight monthly decline. Silver fell about 5.8% to around $49.34. RTTNews reported that crude rose on fears of a wider Middle East conflict and concerns about US–Iran tensions. The dollar index set its weekly low of 101.54 and GBP/USD its high of 1.3436 on Friday.

Pair by pair

EUR/USD: down 0.38%

The euro fell from 1.1203 to 1.1160, and touched 1.1105 on Thursday. The ECB’s pause was the main driver. Lagarde said some members had discussed a hike, but the Governing Council chose to wait, and with the Fed and Bank of England both leaning hawkish, a central bank that holds with a balanced tone looks relatively dovish. RTTNews also mentioned continuing problems in France. Stronger-than-expected euro area GDP helped limit the damage.

GBP/USD: up 0.14%

Sterling edged up from 1.3373 to 1.3392, its third weekly gain in a row in this run of recaps. With money markets almost fully pricing a Bank of England hike on 5 November, the pound has been one of the steadier majors. ING expects a 7–2 vote in favour of a rise to 4%.

USD/JPY: up 0.43%

USD/JPY rose from 156.87 to 157.55. The BoJ’s statement was hawkish in tone, with its first acknowledgement that underlying inflation had reached 2%, but it did not hike, and a Reuters poll cited by FXStreet showed about 70% of economists expected a hike to 1.5% by the end of the year. The Fed’s dissents pointed the other way. With both central banks leaning hawkish, the pair moved little in net terms.

AUD/USD: flat

The Aussie finished at 0.7033, almost exactly where it started. Hot inflation data pushed RBA hike odds up, which kept it above 0.70, while Friday’s risk-off move in equities capped it.

Gold: down 3.74%

Gold had its second big losing week in a row, closing at $3,875.19. Two forces worked together. First, the macro picture: strong US growth, PCE inflation at 3.6% and two Fed officials voting for a hike kept expectations of a December increase high; CNBC cited CME FedWatch at about 75%. Second, Friday’s liquidation: when stocks fall sharply and traders face margin calls, they often sell whatever is liquid and profitable, and gold, after years of gains, fits that description. FinanceFeeds noted that the 10-year Treasury yield and dollar index moved little on Friday, which is why it attributed the drop to rate-hike expectations and forced selling rather than to the dollar.

Reading a central bank week

Three decisions in three days is a good chance to practise reading central bank communication. Some points that applied this week:

The decision is rarely the news

All three holds were expected. What moved markets was the detail: the Fed vote split, the ECB’s risk assessment, and the BoJ’s statement on underlying inflation. Our guide on central banks and interest rates explains why forward guidance often matters more than the decision.

Dissents are signals

A dissent shows that at least one policymaker wants a different path, and it can hint at where the majority is heading. The Fed’s two hawkish dissents and the BoJ’s single dissent were both in favour of hiking.

Relative policy matters most

The euro fell because the ECB sounded less hawkish than the Fed and the Bank of England, not because the ECB was dovish in absolute terms. Currencies always trade in pairs.

Data can arrive alongside decisions

The ECB decision and the US GDP and PCE reports arrived on the same day. On days like that, it can be hard to tell which event caused which move. Our guide to using an economic calendar explains how to check which releases overlap.

Month-end and the October picture

Friday was also the last trading day of October, which brings extra flows from portfolio rebalancing. Looking back over the month as a whole, the themes were consistent: an energy shock driven by the Middle East conflict, US long-term yields at their highest since 2002 early in the month, a euro weighed down by French and Spanish politics, central banks leaning towards higher rates, and gold falling despite the geopolitical tension because higher rates raise the cost of holding it. Across our five October recaps, EUR/USD went from 1.1391 on 25 September to 1.1160 on 30 October, a fall of about 2%, according to RTTNews closing levels.

Risk notes for a volatile week

• Central bank days produce wide spreads and fast moves. See spreads and commissions and slippage explained.
• Liquidation days, like Friday, can push assets that normally move independently in the same direction. Diversification across positions offers less protection than it seems.
• Gold CFDs under ESMA rules are capped at 20:1 leverage for EU retail clients; major currency pairs at 30:1. A 3.74% move in gold at 20:1 is about 75% of the margin posted.
• Most retail CFD accounts lose money; brokers typically disclose between 61% and 89% of accounts. See why most retail CFD traders lose and margin call and stop-out.

Example: a trader with a $5,000 account holds a gold CFD position of 5 ounces opened at $4,025, near the previous Friday’s implied close, using 20:1 leverage, so the margin posted is about $1,006. By Friday’s close at $3,875, the loss is about $150 an ounce, or $750. That is about 15% of the account and roughly three quarters of the margin posted. Had the position been sized to risk 1% of the account, a stop would have closed it far earlier at a loss of about $50. The numbers are illustrative; see position sizing.

What this week teaches

• A hold can be hawkish. The Fed did not move, but two votes for a hike told markets where the risks lie.
• Currencies respond to relative policy. The ECB’s pause weighed on the euro while the Fed and Bank of England leaned towards tightening.
• When central banks on both sides of a pair lean the same way, the pair can move very little, as USD/JPY showed.
• Forced selling can override fundamentals for a day. Gold fell more than 3% on Friday while the dollar and yields barely moved.
• Month-end adds noise; keep that in mind when reading Friday’s moves.

Scheduled next week

These are the scheduled events for Monday 2 to Friday 6 November. This is a list of events, not a view on how markets will react.

• Tuesday 3 November: Reserve Bank of Australia monetary policy decision.
• Tuesday 3 November: US midterm elections.
• Tuesday 3 November: US JOLTS job openings for September.
• Wednesday 4 November: euro area flash inflation estimate for October from Eurostat, at 10:00 UTC.
• Wednesday 4 November: minutes of an earlier Bank of Japan monetary policy meeting, and US international trade in goods and services data.
• Thursday 5 November: Bank of England monetary policy decision; US preliminary third-quarter productivity and costs.
• Friday 6 November, 8:30 am ET: US employment report for October from the Bureau of Labor Statistics.

Sources

• RTTNews: Dollar rallied last week amidst rate hike bets
• RTTNews: Dollar index edged down last week
• Federal Reserve: FOMC statement, 28 October 2026
• Bureau of Economic Analysis: GDP advance estimate, third quarter 2026
• Bureau of Economic Analysis: Personal income and outlays, September 2026
• European Central Bank: Monetary policy statement, 29 October 2026
• European Central Bank: key ECB interest rates
• FXStreet: Bank of Japan leaves rates steady at 1.25%
• FXStreet: Australian dollar edges higher as hot CPI and hawkish RBA lift rate hike bets
• FinanceFeeds: Gold price today, $3,875 after a 7% October drop
• CNBC: Gold slips as higher oil, US inflation data bolster Fed hike bets
• RTTNews: Tech worries, oil price spike hurt market sentiment
• US Bureau of Labor Statistics: Employment Situation release schedule
• Reserve Bank of Australia: cash rate target history
• Forex Fundamentals: euro area HICP calendar
• ING Think: Bank of England set for first rate hike as energy shock worsens