Nomura sees euro outperforming pound, dollar and yen
Nomura strategists expect the euro to outperform the British pound, US dollar and Japanese yen. They see greater fiscal vulnerabilities in the United Kingdom than in the euro area. Strong foreign inflows into euro area bonds and comparatively better debt dynamics support the view.
The Office for National Statistics reported that UK inflation accelerated to 2.9% in July 2026, the highest in four months, after the energy price cap rose 13% and natural gas prices jumped nearly 15% due to the impact of the war in the Middle East, even as food prices, fuel costs, and airfares declined, helping to cushion the rise. The figure was in line with market expectations, leading most analysts to expect the Bank of England to keep its policy rate at 3.75%, as the labour market began to cool, with core inflation steady at 2.6% and services inflation slowing to 3.4%.
Dollar steadies near multi-month lows as rate hike bets dwindle
The U.S. dollar rose slightly on Tuesday but remained near multi-month lows as traders scaled back expectations of Federal Reserve rate hikes, while the threat of escalation in the Middle East war kept sentiment fragile. The euro eased from two-month highs to $1.157, sterling dipped 0.1% to $1.352 on weak UK labour data, and the dollar index traded 0.1% higher at 99.62. Traders now see a 35% chance of a September rate increase, down from 52% a week ago, and no longer fully price in a hike by year-end. Bond yields rose globally, with U.S. 30-year Treasury yields hitting their highest since 2007, as investors focused on inflation risks from the Strait of Hormuz closure and increased fiscal borrowing. Iran said it would shift to a fully offensive military posture after ceasefire talks stalled, while Brent crude touched $91.10 a barrel, its firmest since July 30.
UK budget uncertainty leaves sterling vulnerable against euro, says Rabobank
Rabobank's Senior FX Strategist Jane Foley warns that uncertainty around the UK budget leaves sterling vulnerable against the euro. The Burnham government's planned flexibility in fiscal rules and higher infrastructure spending could lead to increased gilt supply and tax speculation, weighing on the pound.
US dollar rises against yen as markets eye Iran deal and jobs report
The US dollar rose against the Japanese yen on Thursday, helped by safe-haven positioning as investors awaited details on a proposed deal to end the Iran conflict and the upcoming monthly US jobs report. The dollar was last up 0.41% against the yen at 158.41, on track for its third straight session of gains after weakening to as low as 155.20 on Monday, its lowest level since early May. The euro was down about 0.29% at $1.1519 and sterling fell 0.12% at $1.3454. Markets remained watchful as tensions continued in the Gulf, with Reuters reporting a proposed deal between Iran and Oman that could give Tehran control over inbound traffic through the Strait of Hormuz, though there was no immediate US comment. Investors are turning their attention to Friday's US employment report for July, which could provide more clues on the Federal Reserve's interest rate path, with nonfarm payrolls expected to have risen by 80,000 last month after an increase of 57,000 in June and the unemployment rate forecast to hold steady at 4.2%.
GBP/JPY holds near 200-day SMA as downside risks persist
GBP/JPY traded in a narrow range on Thursday, with the British Pound modestly outperforming the Japanese Yen. The Yen remained on the back foot for a third consecutive day, reversing part of the intervention-driven rally that briefly sent GBP/JPY below 210.00 at the start of the week.
The Euro edged lower against the British Pound on Thursday after a three-day rally, with the pair trading at 0.8575 and remaining capped below the late-July top of 0.8586, while downside attempts have been subdued so far.
British Pound holds steady above 1.3450 as Iran hopes and Fed repricing weigh on USD
The British Pound held steady above 1.3450 against the US Dollar, consolidating gains from the past two days and trading around the 1.3470 region during the Asian session on Thursday. The pair's stability came as hopes related to Iran and a repricing of Federal Reserve expectations weighed on the US Dollar.
Dollar weakens as investors sell safe-haven assets on signs of progress in Iran talks
The US dollar weakened against major currencies in New York trading as investors reduced their holdings of the greenback as a safe-haven currency, following signs of progress in talks between Iran and Oman to open the Strait of Hormuz. The dollar index fell 0.18 percent to 99.676, while the euro strengthened to 1.1553 dollars and the pound firmed to 1.3469 dollars. Iranian Foreign Ministry spokesman Esmaeil Baghaei said Iran and Oman have made progress in negotiations to establish a safe commercial shipping route through the Strait of Hormuz and are preparing a joint statement, on condition that certain third parties do not interfere. Meanwhile, US President Donald Trump stated that the United States is close to reaching an agreement with Iran on opening the strait and guaranteeing shipping safety. These signals caused oil prices to ease, reducing inflation concerns and potentially lowering the likelihood of a Federal Reserve rate hike. The CME Group FedWatch Tool indicated that investors are pricing in a 54.9 percent chance of a Fed rate hike in September, down from 58.3 percent a week earlier. The latest economic data from ADP showed that US private-sector employment rose by only 44,000 jobs in July, well below the forecast of 75,000. The ISM services index edged up to 54.1 but also missed expectations. Investors are now focused on the nonfarm payrolls report due Friday, with analysts expecting an increase of 88,000 jobs and the unemployment rate to hold steady at 4.2 percent.
Euro holds gains against Pound ahead of Eurozone and UK Services PMIs
The Euro remained nearly flat against the British Pound on Wednesday, trading at 0.8573 and holding gains from the prior two sessions after bouncing from the 0.8540 area on Friday. Markets are awaiting the release of Eurozone and UK Services PMI data, which could influence the pair's next move.
British Pound rebounds as soft JOLTS and oil decline pressure US Dollar
The British Pound recovered some ground against the US Dollar on Tuesday, rising 0.14% after US jobs data came in softer than expected. The GBP/USD pair traded at 1.3451 after rebounding from 1.3419. The JOLTS report confirmed the strength of the labor market, with layoffs little changed, while a decline in oil prices also weighed on the Dollar.
British Pound holds firm as USD rebounds from intervention rout
The Pound Sterling retreated slightly on Friday as the US Dollar staged a recovery following Thursday’s intervention-driven selloff. The GBP/USD pair traded at 1.3458, down just 0.02%, after the US Dollar Index had fallen to a 30-day low in the prior session.
Bank of England's Pill warns of risk that high energy prices gradually build longer-term inflation pressures
Bank of England Chief Economist Huw Pill has indicated there is a risk that the surge in energy prices stemming from the Iran conflict will gradually build longer-term inflation pressures in the UK. While noting it is welcome that the energy price spike has not yet significantly undermined public confidence in the 2% inflation target, he said it will not be possible to judge until later in the year whether a slower but more troublesome second-round effect is emerging, as firms and workers try to recoup inflation-related losses. Pill voted for a rate hike at the Bank of England meeting on the 30th, dissenting against the decision to hold rates steady.
UK house prices rise for first time in three months, but annual growth slows in July
UK house prices edged up in July for the first time in three months, rising 0.1% from June, bringing the annual growth rate to 1.8%, down from 2.2% in June, according to Nationwide Building Society. Robert Gardner, Nationwide's chief economist, said that elevated geopolitical tensions, particularly the conflict between the US and Iran, have pushed up energy prices and market interest rates in recent weeks. Meanwhile, the Bank of England voted to keep its policy rate at 3.75% at its meeting last Thursday, but markets expect at least a 0.25% rate hike this year, reflecting concerns that the US-Iran war could intensify inflationary pressures beyond the Bank of England's forecasts.
SCB Financial Markets sees baht in 33.30–33.55 per dollar range today
SCB Financial Markets expects the baht to move in a range of 33.30 to 33.55 per dollar today. The baht strengthened yesterday, tracking a stronger yen after reports that Japanese authorities and the Bank of Japan intervened in the yen. Meanwhile, the US dollar index weakened after June core PCE inflation came in below expectations at 0.1 percent month-on-month. The Bank of England voted 6 to 3 to hold its policy rate at 3.75 percent, in line with market expectations.
European Markets Summary: London Stocks Mixed, European Shares Rebound, Eurozone Bond Yields Rise
The London stock market ended mixed, with the FTSE 100 edging lower. The Bank of England held its policy rate steady, while the number of Monetary Policy Committee members voting for a rate hike rose by one from the previous meeting to three. European equity markets rebounded, with the STOXX Europe 600 Banks index climbing 2.63 percent, as banking and industrial stocks were bought on solid earnings. In eurozone bonds, regional government bond yields rose, with the German 30-year yield up 3 basis points to 3.14 percent. In currency markets, the euro traded at 1.1520 dollars and the dollar at 159.47 yen.
Pound surges after Bank of England holds rates in hawkish vote
The British Pound strengthened against the US Dollar after the Bank of England held interest rates unchanged in a 6-3 vote, a decision seen as hawkish. Suspected intervention to boost the Japanese Yen further weakened the Greenback against most G8 currencies. GBP/USD traded at 1.3430, up 0.40%.
Bank of England Governor Bailey says no suggestion of leaning towards rate hikes
Bank of England Governor Bailey said there is no suggestion that he is leaning towards raising interest rates. The remarks appear aimed at pushing back against growing market speculation about an early tightening of monetary policy.
GBP/USD rally unlikely to last after hawkish BoE vote, says TD Securities
TD Securities FX strategist Howard Du said the British pound's rally against the US dollar is unlikely to last. GBP/USD initially rose 0.3% after the Bank of England's 6-3 vote split, with Catherine Mann joining the hike camp. However, the rest of the committee appears comfortable holding rates given limited second-round effects.
British Pound steadies against Euro as BoE leaves interest rate unchanged
The British Pound steadied against the Euro after the Bank of England left its interest rate unchanged. EUR/GBP traded almost flat on Thursday, hovering close to its highest level in nearly a month as the Pound modestly outperformed the Euro following the monetary policy decision.
Bank of England Holds Rate at 3.75% in 6-3 Vote, One More Member Backs Hike
The Bank of England decided on the 30th to keep its policy rate unchanged at 3.75%. The Monetary Policy Committee vote was 6 to 3, with one additional member supporting a rate hike compared to the previous meeting, bringing the total to three. Catherine Mann joined Megan Greene and Huw Pill in voting for an increase to 4%, while the other members, including Governor Bailey, maintained a wait-and-see stance. The central bank views the secondary effects of rising energy prices as limited, and indicated that inflation is expected to rise to 3.2% within the year before staying above the 2% target until early 2028.
Dollar slips against yen as markets await US inflation data
The dollar weakened against the yen on Thursday ahead of a U.S. inflation report that investors will scrutinize to gauge the path for interest rates. The yen rose 0.3% to a one-week high of 162.88 per dollar, though traders said the move did not reflect intervention by Japanese authorities. The dollar had initially gained after the U.S. conducted air strikes in Iran, but came under pressure as focus shifted to the Personal Consumption Expenditures Index due at 1230 GMT, with economists expecting annual price pressures to have eased to 3.7% in June from 4.1% in May. The euro was flat at $1.1477, while the dollar index was muted at 100.67. The Bank of England kept rates on hold as expected, but the pound firmed 0.1% to $1.338 after a third policymaker backed a hike, and traders now see a 34.5% chance of a BoE rate increase in September.
GBP/USD falls near 1.3350 ahead of Bank of England rate decision
The GBP/USD pair met with fresh supply on Thursday and retreated further from the weekly high around the 1.3385-1.3390 region touched the previous day. The pair kept the red near 1.3350 as traders awaited the Bank of England rate decision.
European stocks open directionless as markets await GDP, inflation data, and Bank of England decision
European stocks opened Thursday's session without a clear direction, pressured by Middle East tensions and anticipation of key economic data. The STOXX 600 index opened at 644.14 points, down 0.13 percent, while France's CAC-40 opened 0.02 percent higher and Germany's DAX gained 0.11 percent. Investors are watching for the release of preliminary second-quarter GDP figures, July inflation data, and June unemployment numbers for the eurozone, as well as the outcome of the Bank of England meeting, where markets expect interest rates to be held steady. Also in focus are earnings from major companies such as Schneider Electric, British American Tobacco, and Sanofi.
British Pound retreats from weekly high against firmer US dollar
The British pound retreated from a weekly high against a firmer US dollar during Asian trading on Thursday. The GBP/USD pair struggled to build on the previous day's strong gains and drifted lower. Attention now turns to the Bank of England and upcoming US economic data.
GBP/JPY rises above 218.00 as risk appetite improves
The GBP/JPY pair advanced by over 0.30% to trade above 218.00, reaching near 218.50 after a daily low of 217.16. The move came as risk appetite improved amid overall US Dollar weakness following the Federal Reserve's monetary policy decision.
Fed Holds Rates Steady, Dollar Falls Broadly, Yen at 163 Range
The dollar fell across the board in New York foreign exchange trading, with the yen moving into the 163 range against the dollar. The move came after the Federal Reserve held its policy rate steady at 3.50 to 3.75 percent at the Federal Open Market Committee meeting, marking the fifth straight hold, though three of the twelve members dissented in favor of a quarter-point rate hike. The dollar index slipped 0.3 percent to 101.07, the euro rose 0.4 percent to 1.14315 dollars, and the British pound gained 0.4 percent to 1.3342 dollars. Growing expectations that the Fed will be cautious about further rate hikes this year fueled dollar selling. Meanwhile, the Bank of Japan is expected to keep rates unchanged at its policy meeting through the 31st, but is seen leaving room for additional hikes through hawkish communication, and with simmering intervention caution, the yen remains near its highest levels in 40 years.
UK Inflation to Exceed Target Until 2029, NIESR Forecasts
The National Institute of Economic and Social Research, a British think tank, has projected that UK inflation will remain above the Bank of England's target until 2029. It raised its 2026 GDP growth forecast to 1.1 percent, up from a previous estimate of 0.9 percent. The average inflation forecast for 2026 was revised up to 3.1 percent from 2.6 percent in June, while the peak is now seen at 3.8 percent in February 2027, down from an April forecast of 4.1 percent. Inflation is expected to return to the target range in 2029, a year later than previously thought. The central bank is expected to hold its policy rate this year and next, but NIESR sees a possibility of a hike from 3.75 percent to 4 percent if energy prices rise further.
GBP/USD rises to near 1.3345 ahead of Fed and BoE policy decisions
The British Pound rose 0.15% against the US Dollar to near 1.3345 during European trading on Monday. The move comes ahead of policy announcements from the Federal Reserve and the Bank of England, with a volatility contraction pattern breakout likely following the decisions.
British Pound strengthens beyond mid-1.3300s against weak US Dollar
The GBP/USD pair built on Friday's modest bounce from a three-week low and gained strong follow-through positive traction at the start of a new week, strengthening beyond the mid-1.3300s against a weak US Dollar amid fresh Iran diplomacy hopes.
Key Events This Week: FOMC, Bank of Japan, Bank of England Policy Meetings, US PCE Price Index, US Treasury Auctions
This week, in addition to the Federal Open Market Committee meeting, policy decisions are scheduled from the Bank of Japan and the Bank of England. The FOMC meets on July 28 and 29, and is expected to hold interest rates steady, though short-term money markets are pricing in a slightly less than 40 percent chance of a rate hike, with the possibility of two hikes this year in focus. In the US, the PCE price index, a key inflation gauge for the Fed, and second-quarter GDP will be released, while Treasury auctions of two-year, five-year, and seven-year notes will also draw attention. The Bank of England is widely expected to keep rates unchanged at its Monetary Policy Committee meeting on the 30th, and the Bank of Japan is also anticipated to stand pat at its meeting on the 30th and 31st.
Fed, BOJ, and BOE Set to Decide Policy This Week — Focus on Caution Over Oil Nearing $100
The Federal Open Market Committee, the Bank of Japan, and the Bank of England will each decide monetary policy this week. With oil prices climbing back to around $100 a barrel, the focus is on how concerned each central bank is. The FOMC meets on the 28th and 29th, the BOJ on the 30th and 31st, and the BOE announces on the 30th. All are expected to hold steady, but they are likely to signal caution over accelerating inflation from surging energy costs. There is also talk that Fed Chair Warsh could surprise markets with a rate hike.
Focus on the Bank of Japan's monetary policy stance, with key economic indicators due at home and abroad
Among the major economic indicators to be released from July 27 to 31, the Bank of Japan's monetary policy meeting will be the biggest focus. The BOJ policy rate, expected to be announced around noon on the 31st, is widely seen being held steady at 1.00 percent. Attention will be on whether the simultaneous release of the Outlook Report and Governor Ueda's press conference will hint at the timing of additional rate hikes. If a proactive stance toward early rate hikes is indicated, yen buying could strengthen; if no specific timing is given, yen selling may intensify. Elsewhere, on the 29th, Australia's June consumer price index is expected to accelerate to a year-on-year increase of 4.4 percent, which will influence expectations for further rate hikes by the Reserve Bank of Australia. On the 30th, the Bank of England's policy rate announcement is expected to hold steady at 3.75 percent, while in the United States, the advance estimate of April-June quarter GDP is forecast at an annualized quarter-on-quarter increase of 2.3 percent, and the PCE deflator is seen rising 3.6 percent year-on-year, likely affecting the Federal Reserve's policy outlook.
European Shares Edge Higher as Brent Falls Below $100
European stocks rebounded on Friday after their steepest single-day loss in over two weeks, with the pan-European STOXX 600 rising half a percent to 642.32. The recovery came as Brent crude futures slumped nearly 4 percent below $97 a barrel, having topped $100 on Thursday following Houthi attacks on tankers in the Red Sea. The British pound strengthened after official data showed UK retail sales unexpectedly grew 1.0 percent in June, beating forecasts of a 0.3 percent decline. Among individual movers, SAP jumped 6 percent on higher quarterly revenue, while Securitas plummeted 11 percent after reporting lower-than-expected second-quarter core profit.
Euro extends rally against British Pound to two-week high
The Euro rallied further against the British Pound, with EUR/GBP jumping to near 0.8550 in European trading on Friday, its highest level in two weeks. The move came despite upbeat United Kingdom Retail Sales data for June, which failed to support the Pound. The pair's advance marked an extension of the Euro's recent strength against the British currency.
The GBP/JPY pair is rotating for the third straight day, trading unchanged at 218.17. A bullish harami chart pattern has opened the door for further upside, but intervention fears by Japanese authorities are capping the cross-pair's advance. Bulls are now eyeing a breakout above the 219 level.
Euro rallies against the Pound for sixth straight day
The Euro appreciated for the sixth consecutive day against the British Pound on Thursday, with bulls testing last week’s highs at the 0.8645 area. The Sterling remained offered across the board as investors wondered how the new cabinet will fund its spending pledges.
The British Pound trades marginally higher against the US Dollar, edging up to near 1.3387 during European trading on Thursday. The pair's slight gain comes as the US Dollar drops despite surging oil prices driven by escalating Middle East energy supply risks. The move leaves GBP/USD still struggling to reclaim its 20-day exponential moving average.
SCB expects baht to move in a range of 33.65 to 33.90 per dollar today
The financial markets group at Siam Commercial Bank estimates the baht will move in a range of 33.65 to 33.90 per dollar today. The baht weakened yesterday in line with crude oil prices surging above 95 dollars per barrel after the Houthis claimed to have attacked a Saudi oil tanker in the Red Sea. Meanwhile, US President Donald Trump threatened to strike bridges, power plants, and areas around Tehran if Iran attacks ships in the Strait of Hormuz again. The yen strengthened earlier on news that the Bank of Japan is ready to raise rates sooner than the market expects, but weakened again shortly after. UK inflation slowed to 2.6 percent, the lowest level in over a year.
SCB Financial Markets sees baht in 33.65–33.90 per dollar range today
SCB Financial Markets expects the baht to move in a range of 33.65 to 33.90 per dollar today. The baht weakened yesterday as crude oil prices surged above 95 dollars per barrel after the Houthis claimed to have attacked a Saudi oil tanker in the Red Sea, while US President Donald Trump threatened to strike bridges, power plants, and areas around Tehran if Iran attacks ships in the Strait of Hormuz again. The yen briefly strengthened on news that the Bank of Japan is ready to raise rates sooner than the market expects, before weakening again. Meanwhile, UK inflation slowed to 2.6 percent, the lowest level in over a year.