The euro rose in European trading on Friday against a basket of global currencies, attempting to recover from a two-week low versus the US dollar, supported by softer dollar levels amid sharp volatility across financial markets.

In line with expectations, the European Central Bank kept interest rates unchanged for the fifth consecutive meeting and confirmed that monetary policy remains restrictive, aimed at bringing inflation back to the target range.

Price overview

The euro exchange rate today: The euro rose against the dollar by 0.2% to $1.1802, from today’s opening level at $1.1777, and recorded a low of $1.1766, the weakest level since January 23.

The euro closed Thursday down by 0.25% against the dollar, marking its second consecutive daily loss, as investors continued to favor the US currency.

The US dollar

The dollar index fell by about 0.2% on Friday, pulling back from a two-week high and heading toward its first loss in three sessions, reflecting softer performance of the US currency against a basket of major and minor currencies.

Aside from profit-taking, the dollar weakened amid sharp volatility across most global financial markets, ahead of crucial talks between the United States and Iran, and after Washington urged its citizens to leave Iranian territory immediately.

European Central Bank

As expected, the European Central Bank kept its main interest rates unchanged on Thursday at 2.15%, the lowest level since October 2022, marking the fifth straight meeting without change.

The ECB reiterated a data-dependent, meeting-by-meeting approach with no pre-commitment to a specific rate path, and stressed that monetary policy remains restrictive to ensure inflation returns to target.

Christine Lagarde

ECB President Christine Lagarde said Thursday that the bank will not commit to a predetermined path for rate cuts, noting that the March decision will depend entirely on incoming data in the coming weeks.

Lagarde confirmed that the ECB is closely monitoring the euro exchange rate, adding that the current strength of the single currency helps contain imported inflation and may support reaching targets without the need for further tightening.

She added that services inflation still requires monitoring, but the overall outlook has become more balanced compared with late 2025.

European interest rates

Following the meeting, money market pricing for a 25 basis point ECB rate cut in March fell from 50% to around 30%.

To reprice those expectations, investors are waiting for further eurozone data on inflation, unemployment, and wages.

The Japanese yen rose in Asian trading on Friday against a basket of major and minor currencies, posting its first gain in six days versus the US dollar, as it attempts to recover from a two-week low, supported by moderate buying from oversold levels.

Despite this rebound, the yen is on track to record its largest weekly loss this year, amid growing speculation over the outcome of Japan’s general election scheduled for the weekend. The latest opinion polls show a sweeping lead for the ruling coalition led by current Prime Minister Sanai Takaichi, giving her a green light to move forward with expansionary plans to stimulate the economy.

Price overview

The Japanese yen exchange rate today: The dollar fell against the yen by 0.3% to ¥156.51, from today’s opening level at ¥157.02, and recorded an intraday high of ¥157.05.

The yen closed Thursday down by 0.15% against the dollar, marking its fifth consecutive daily loss, and hit a two-week low at ¥157.34 per dollar, driven by election-related speculation in Japan.

Weekly performance

So far this week — which officially ends with today’s settlement — the Japanese yen is down about 1.2% against the US dollar. This would mark its first weekly loss in three weeks and the largest weekly decline since December 2025.

Japanese elections

Global markets are closely watching Japan ahead of the early general election scheduled for Sunday. Prime Minister Sanai Takaichi is seeking a strong mandate to increase spending, cut taxes, and pass a new security strategy expected to accelerate the country’s defense buildup.

Opinion polls

The latest opinion polls indicate a sweeping lead for the ruling Liberal Democratic Party led by Sanai Takaichi, strengthening her chances of forming a strong government after the election.

Polls by Asahi newspaper and Kyodo News suggest the ruling coalition could win a decisive majority, with the Liberal Democratic Party expected to exceed the absolute majority threshold of 233 seats, and the coalition with its partners potentially reaching around 300 seats out of 465.

Takaichi continues to show solid approval ratings, with recent polls indicating government support between 57% and 64%. Her popularity is especially strong among younger voters aged 18–29, where approval in some surveys has approached 90%.

Sanai Takaichi

Japanese Prime Minister Sanai Takaichi said on Saturday that a weaker yen has positive aspects, in remarks that appeared to contrast with repeated Finance Ministry warnings about possible intervention to support the currency.

In a campaign speech ahead of next week’s election, Takaichi said that despite criticism of the weak yen, it represents a valuable opportunity for export sectors, from food industries to automobiles. She added that the currency’s decline has acted as a buffer against US tariffs and provided tangible support to the economy.

Japanese interest rates

Market pricing for a quarter-point interest rate hike by the Bank of Japan at the March meeting remains below 10%.

To reprice those expectations, investors are awaiting further data on inflation, unemployment, and wages in Japan.

Outlook for the Japanese yen

Carol Kong, currency strategist at Commonwealth Bank of Australia, said that a strong performance by the Liberal Democratic Party would encourage Takaichi to proceed with economic stimulus plans, increasing the risk of a heavier government debt burden and weighing on Japanese government bonds and the yen.

Samara Hammoud, also a currency strategist at Commonwealth Bank of Australia, said that a landslide victory for the ruling party would ease short-term constraints on Takaichi’s fiscal policy goals, including cutting the consumption tax.

She added that it remains unclear how Takaichi plans to finance expansionary fiscal policy, and renewed concerns over rising government debt would negatively affect Japanese government bonds and the yen.

US stock indices declined during Thursday’s trading session, extending losses for a third consecutive session amid broad-based selling across the markets.

Government data released yesterday showed that the US private sector added 22,000 jobs last month, below expectations that called for 45,000 new jobs, signaling a continued slowdown in the labor market in the world’s largest economy at the start of 2026.

Additional data released today showed that US job openings totaled 6.54 million in December, missing expectations for 7.25 million openings.

Due to the ongoing government shutdown, it was announced yesterday that the US monthly jobs report for January, which had been scheduled for release next Friday, has been postponed and will now be issued on February 11.

In trading, the Dow Jones Industrial Average fell by 0.8% (about 408 points) to 49,093 as of 17:16 GMT. The broader S&P 500 index declined by 0.9% (about 62 points) to 6,820, while the Nasdaq Composite dropped by 1.0% (about 235 points) to 22,668.

Bitcoin dropped below a new five-digit threshold, highlighting continued pressure on the world’s largest cryptocurrency.

The leading digital asset by market value — estimated at about $1.39 trillion according to CoinMarketCap — was recently trading at levels not seen since late 2024, after falling below $70,000 per coin. While the price has not been cut in half from its record peak of around $125,000 reached last autumn, the decline is still considered sharp.

The latest wave of selling in Bitcoin comes as investors have recently moved away from higher-risk assets and, in some cases, reallocated portfolios toward more defensive options. For full coverage of today’s trading, see Investopedia.

When market experts are asked what comes next for Bitcoin, opinions vary widely. Optimists continue to point to the cryptocurrency’s long-term potential, not only to recover but to post sharp, accelerating gains similar to prior cycles. Pessimists, on the other hand, warn that further significant losses remain possible. The current market move is also affecting related equities, not just crypto assets themselves.

Among those companies is Strategy, one of the largest corporate buyers of Bitcoin, formerly known as MicroStrategy, which is scheduled to report quarterly results after today’s market close. Earlier this week, the company disclosed its latest Bitcoin purchase, lifting its average acquisition cost to roughly $76,000 per coin.

Any updates or comments from the company and its executives — including executive chairman Michael Saylor — could trigger additional moves in Bitcoin. The company is also promoting the participation of prominent Bitcoin analysts in its investor conference call.

Saylor maintained his bullish tone this week in social media posts, describing the recent price volatility as “a gift for believers.”

Strategy shares fell 7% ahead of Thursday’s opening bell. The stock, which previously recorded strong gains, has lost more than 70% of its value since reaching its all-time high last July.