FX Weekly Recap: February 2 – 6, 2026

The first full trading week of February delivered a volatile mix of central bank surprises, deteriorating labor market data, and sharp risk-off sentiment that upended traditional currency correlations. Australia’s Reserve Bank shocked markets with its first rate hike in over two years, propelling the Aussie to the week’s top performance, while the Japanese yen suffered its worst showing despite typically benefiting from market stress. The U.S. dollar defied weak employment figures—including a dismal ADP report and plunging JOLTS openings—to finish positive against most majors as safe-haven flows dominated.

Central banks took center stage mid-week, with the Bank of England’s unexpectedly close vote split and the ECB’s dovish hold reshaping rate expectations. Meanwhile, technology stocks endured brutal selling pressure on AI disruption fears, precious metals crashed, and cryptocurrencies suffered violent deleveraging. The week underscored how policy divergence and shifting risk sentiment can override traditional fundamental drivers in currency markets.