Forex News
Deutsche Bank strategists note that the European Central Bank (ECB) kept its deposit rate at 2.25%, while its communication continued to leave the door open to further tightening. They now see a September increase to 2.50% as highly likely, with the risk of an additional hike if energy prices remain persistently elevated or evidence of second-round effects emerges.
ECB guidance underpins Euro rate expectations
"Staying with the ECB, in their latest policy decision yesterday they kept their deposit rate at 2.25% as widely expected, while implying that further hikes were still likely."
"Both the short decision statement and Lagarde’s press conference noted that the latest outlook was broadly unchanged relative to the ECB’s June baseline scenario which had been predicated on market pricing of three hikes this cycle (so two more after the June hike)."
"Lagarde also said yesterday that the ECB’s reaction function was "very well understood" by markets, showing no desire to push back on market pricing."
"Our European economists now see a September hike to 2.50% as a near done deal."
"Risks are clearly skewed towards a further hike thereafter, but this would require persistently elevated energy prices and/or evidence of second-round effects."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- NZD/USD rebounds modestly on Friday after falling to its lowest level in more than a week.
- Strong New Zealand inflation supports expectations of further Reserve Bank of New Zealand tightening.
- Geopolitical tensions and resilient US economic data continue to underpin the US Dollar ahead of next week's Fed meeting.
NZD/USD trades around 0.5790 on Friday at the time of writing, up 0.27% on the day as the pair recovers from a one-and-a-half-week low, although bullish momentum remains limited by the underlying strength of the US Dollar (USD).
The Greenback continues to draw support from rising geopolitical tensions in the Middle East after the United States (US) carried out another round of military strikes against Iran, while Iran and its allies responded with attacks targeting US-linked military assets across the region. Additional attacks on shipping routes in the Red Sea and the closure of the Strait of Hormuz have heightened concerns over global Oil supply disruptions, pushing energy prices higher and reviving inflation fears.
The prospect of higher energy-driven inflation reinforces expectations that the Federal Reserve (Fed) could keep monetary policy restrictive for longer and potentially deliver another interest rate hike before the end of the year. Thursday's Initial Jobless Claims data, which fell to 187K and significantly beat expectations, also highlighted the continued resilience of the US labor market, providing further support to the US Dollar.
At the same time, the New Zealand Dollar (NZD) finds support after stronger-than-expected inflation data reinforced expectations that the Reserve Bank of New Zealand (RBNZ) will continue tightening monetary policy, with markets still anticipating another rate increase at the September meeting.
Looking ahead, investors will focus on the preliminary S&P Global Purchasing Managers Index (PMI) data from the United States later on Friday. Beyond the headline figures, traders will closely monitor business sentiment and input price components for fresh clues on inflationary pressures ahead of next week's Federal Open Market Committee (FOMC) policy meeting, while NZD/USD is likely to remain driven primarily by broader US Dollar sentiment.
New Zealand Dollar Price Today
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.09% | -0.05% | -0.03% | -0.04% | -0.33% | -0.25% | 0.00% | |
| EUR | 0.09% | -0.00% | 0.00% | -0.00% | -0.30% | -0.24% | 0.04% | |
| GBP | 0.05% | 0.00% | 0.02% | 0.00% | -0.28% | -0.21% | 0.05% | |
| JPY | 0.03% | 0.00% | -0.02% | 0.00% | -0.30% | -0.23% | 0.02% | |
| CAD | 0.04% | 0.00% | -0.00% | -0.00% | -0.30% | -0.24% | 0.03% | |
| AUD | 0.33% | 0.30% | 0.28% | 0.30% | 0.30% | 0.08% | 0.32% | |
| NZD | 0.25% | 0.24% | 0.21% | 0.23% | 0.24% | -0.08% | 0.25% | |
| CHF | -0.00% | -0.04% | -0.05% | -0.02% | -0.03% | -0.32% | -0.25% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
European Central Bank (ECB) Governing Council member and head of Lithuania's central bank, Gediminas Simkus, said during European trading hours on Friday that the chances of an interest rate hike in the near term are higher than maintaining the status quo. Simkus also ruled out fears of second-round effects of higher inflation.
Additional remarks
$100 oil will have repercussions on inflation.
Inflationary environment has increased.
No value in rushing with a decision now.
In September, again we'll have additional inflation data.
Still see probability of rate hike higher than hold.
We do not see second-round effects of higher inflation.
Inflation seen higher than target for a long time.
Market reaction
A slight recovery move is seen in the Euro (EUR) following ECB Simkus's remarks. At press time, EUR/USD trades 0.1% higher to near 1.3325.
ECB FAQs
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
- The S&P Global flash PMIs for July are expected to show stable business expansion.
- Investors will pay close attention to comments surrounding input costs.
- EUR/USD remains technically bearish in the near term.
S&P Global will release the July flash Purchasing Managers' Indices (PMIs) for the United States (US) on Friday. These surveys of top private-sector executives are seen as an early indicator of the country’s economic health.
Market participants anticipate the S&P Global Services PMI to decline slightly to 51.0 from 51.2 in June, while the S&P Global Manufacturing PMI is expected to edge higher to 54.5 from 53.9, with both prints remaining in the expansion territory above 50. In addition to headline PMI figures, the surveys also include comments on employment and input inflation, which could influence the US Dollar’s (USD) valuation.
What can we expect from the next S&P Global PMI report?
While PMI surveys are forecast to reaffirm healthy business conditions in the private sector, details surrounding input costs could ramp up market volatility. Although the softer-than-expected June inflation data from the US eased bets for a Federal Reserve (Fed) interest rate hike in July, the recent increase in Oil prices caused investors to refrain from pricing in a prolonged policy hold.
With the US and Iran ramping up military aggression in the Middle East, the barrel of West Texas Intermediate (WTI) is up nearly 30% in July. In the meantime, the CME FedWatch Tool shows that markets are pricing in a nearly 80% probability of an at least 25 basis points (bps) Fed rate hike by September.
Previewing the PMI data, “we expect both the S&P manufacturing and services PMIs to improve in July. Manufacturing is likely to rebound to 54.5, in line with strong regional surveys in the month (Empire and Philly Fed),” TD Securities analysts said.
“Meanwhile, services is likely to continue improving to 51.5. NY Fed services improved in July, and we expect S&P to begin catching up to ISM,” they added.
When will the July flash US S&P Global PMIs be released and how could they affect EUR/USD?
The S&P Global Manufacturing, Services, and Composite PMIs reports will be released at 13:45 GMT on Friday. As previously noted, they are expected to show that US business activity continued to expand in July.
In case the publication suggests that business owners are facing increasing input costs in July and considering transferring those costs to customers by raising prices, markets could see that as a sign of inflationary pressures resurfacing again in July. In this scenario, the USD could continue to gather strength heading into the weekend and weigh on EUR/USD.
Conversely, an unexpected drop into the contraction territory below 50, in either the headline Manufacturing or the Services PMI, could hurt the USD with the immediate reaction and help EUR/USD hold its ground.
Middle East tensions risk being underplayed in early July PMI signals
Analysts at Rabobank caution that the initial July PMI signals may not fully capture the latest geopolitical and commodity-market developments. They argue that “this preliminary reading may understate the impact of the escalation in the Middle East,” noting that “the July poll was probably conducted in the past two weeks, so the results may be skewed if many respondents replied early – and therefore could not fully factor in the current situation in the Middle East, or this week’s increase in oil prices.”
Eren Sengezer, European Session Lead Analyst, shares a brief technical outlook for EUR/USD:
“EUR/USD trades below the 20-day Simple Moving Average (SMA) following multiple failed attempts to clear that level earlier in the week. Additionally, the Relative Strength Index (RSI) indicator on the daily chart stays near 40, reaffirming the bearish stance.”
“On the downside, 1.1370-1.1350 (Bollinger Band lower arm, static level) aligns as the first support area ahead of 1.1270 (static level) and 1.1160 (static level). Looking north, the immediate resistance level could be spotted at 1.1420 (20-day SMA), followed by 1.1470 (Bollinger Band upper arm) and 1.1570 (100-day SMA).”
(This story was corrected on July 24 at 10:36 GMT to say when the July flash US S&P Global PMIs will be released and how they could affect EUR/USD, not June.)
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
According to Commerzbank’s Tatha Ghose, the Central Bank of the Republic of Türkiye (CBRT) kept its one-week repo rate at 37.0% and maintained the corridor at 35.5%-40.0%. With the repo window still closed, effective funding remains near 40%, which Ghose views as Lira-supportive. Renewed Oil price gains, rising inflation expectations and fragile FX reserves justify CBRT’s cautious stance.
High effective rate seen lira-positive
"Turkey’s central bank (CBRT) left its one-week repo rate at 37.0% yesterday, as unanimously expected; and also left the interest rate corridor unchanged at 35.5%-40.0%. The repo rate is still not the effective interest rate because CBT has kept the weekly repo window closed since the Iran shock, pushing funding towards the 40% overnight lending facility."
"Hence, we think that whenever CBRT officials hint at gradually bringing back repo, that will tantamount to a rate cut – and prove problematic for the exchange rate. CBRT did not provide such a signal, or hint about timing, yesterday, which counts as positive news."
"But, it was not entirely surprising given the renewed jump in oil prices. The statement cited rising energy prices and geopolitical uncertainty, while noting that the underlying inflation trend had softened slightly in June, but would rise again in July. This is precisely the problem. "
"June’s CPI data looked better in raw month-on-month terms, but even that still implied 1.8%m/m after seasonal adjustment. July may move back above 2%m/m, helped by administered price increases and the unwinding of the fuel tax discount."
"So the question is: should we still look back at an outdated data-point and be encouraged by it? Or, should we ignore it? Inflation expectations have worsened again, FX reserves are not yet comfortable, and the balance of payments remains vulnerable."
"For now, CBRT gave no immediate signal about when effective funding could be normalised back down from 40% to 37%. And that, by itself, has to count as lira-positive, at the margin."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/GBP trades around 0.8550 on Friday, little changed on the day.
- Flash PMIs from Germany, the Eurozone and the United Kingdom all beat market expectations.
- Risk aversion driven by Middle East tensions limits the reaction of European currencies.
EUR/GBP trades around 0.8550 at the time of writing on Friday, remaining broadly stable despite a series of stronger-than-expected economic releases from the Eurozone and the United Kingdom (UK). Investors continue to favor a cautious stance as escalating geopolitical tensions in the Middle East overshadow the positive macroeconomic data and keep currency market moves limited.
Preliminary S&P Global surveys point to a stronger-than-expected improvement in economic activity across Germany and the Eurozone. Germany's Manufacturing Purchasing Managers Index (PMI) jumps to 52.2 in July from 50.3 in June, well above the 50.1 consensus forecast. Germany's Composite PMI also returns to expansion territory at 51.2, supported by a strong rebound in manufacturing activity, while the services sector remains slightly below the 50 threshold.
Across the Eurozone, Manufacturing PMI also accelerates, rising to 52 from 51.4 and beating expectations of 51.3. Services activity also returns to expansion territory with a reading of 51.6, lifting the Composite PMI to 51.9, comfortably above market expectations. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said the Eurozone economy is enjoying a welcome revival in July, while warning that the geopolitical environment continues to cloud the outlook.
The British Pound (GBP) also draws support from stronger domestic data. UK Retail Sales rise by 1% MoM in June, defying expectations for a 0.3% decline. Meanwhile, the preliminary S&P Global surveys show the Services PMI returning to expansion at 51.8, while the Manufacturing PMI accelerates to 52.8, both exceeding market forecasts. As a result, the Composite PMI climbs to 52.1, pointing to stronger overall business activity at the start of the third quarter.
On the monetary policy front, European Central Bank (ECB) Governing Council member Martin Kocher said he sees no hard evidence of second-round inflation effects, while stressing that the ECB remains vigilant and stands ready to act should the inflation outlook deteriorate. He nevertheless acknowledged that recent developments in Oil markets remain a source of concern.
Despite the encouraging economic releases, the Euro (EUR) and the British Pound struggle to extend their gains. Concerns about the economic consequences of the conflict in the Middle East, higher energy prices and the latest tariff announcements from the US President Donald Trump administration continue to fuel risk aversion, supporting safe-haven assets and limiting moves in EUR/GBP.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.11% | 0.00% | -0.07% | -0.04% | -0.27% | -0.19% | -0.01% | |
| EUR | 0.11% | 0.07% | 0.00% | 0.02% | -0.23% | -0.14% | 0.05% | |
| GBP | -0.00% | -0.07% | -0.07% | -0.04% | -0.29% | -0.18% | -0.02% | |
| JPY | 0.07% | 0.00% | 0.07% | 0.03% | -0.22% | -0.13% | 0.04% | |
| CAD | 0.04% | -0.02% | 0.04% | -0.03% | -0.25% | -0.17% | 0.01% | |
| AUD | 0.27% | 0.23% | 0.29% | 0.22% | 0.25% | 0.10% | 0.25% | |
| NZD | 0.19% | 0.14% | 0.18% | 0.13% | 0.17% | -0.10% | 0.16% | |
| CHF | 0.00% | -0.05% | 0.02% | -0.04% | -0.01% | -0.25% | -0.16% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Silver prices (XAG/USD) rose on Friday, according to FXStreet data. Silver trades at $58.40 per troy ounce, up 1.98% from the $57.27 it cost on Thursday.
Silver prices have decreased by 17.84% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 58.40 |
1 Gram | 1.88 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 69.50 on Friday, down from 70.72 on Thursday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
- The Indian Rupee attracts significant bids against the US Dollar on provisional RBI support.
- Higher oil prices will likely keep the Indian Rupee under pressure.
- US Treasury Yields surge on revival of hawkish Fed bets.
The Indian Rupee gains strongly after a flat opening against the US Dollar (USD) on Friday. The USD/INR pair declines to near 96.50 as the Reserve Bank of India (RBI) has intervened again to support the Indian Rupee.
According to a Reuters report, the Indian central bank is likely selling US dollars near 96.80 INR levels. The report also showed that state-run banks were spotted offering US dollars, most likely on the RBI's behalf.
On Thursday, the RBI also intervened in spot and non-deliverable forwards (NDFs) markets to provide a cushion to the Indian currency.
However, the provisional support by the RBI is expected to be short-lived as surging oil prices and the revival of Federal Reserve (Fed) interest rate expectations will likely batter the Indian Rupee soon.
Escalating US-Iran conflicts keep oil prices higher
Oil prices have rallied significantly in the past few weeks due to renewed military aggression between the United States (US) and Iran. In retaliation, Yemen’s Iran-aligned Houthis have closed the Bab el-Mandeb Strait, the southern gateway of the Red Sea, which has squeezed global energy supply further.
No signs of a diplomatic breakthrough between the nations have prompted fears that oil supply tightness could be prolonged, a scenario that bodes poorly for currencies from economies, such as India, which rely heavily on oil imports to fulfill their energy needs.
Rising oil prices revive hawkish Fed bets
Fed interest rate hike expectations have shown a resurgence as surging oil prices have de-anchored inflation projections. According to the CME FedWatch tool, the odds of the Fed delivering an interest rate hike at the policy meeting next week stand at 35.8%, significantly higher than the 11.8% recorded last week.
The revival of hawkish Fed bets has prompted US Treasury Yields, which typically result in diminishing the appeal of risky currencies. At press time, US Treasury Yields trade at around 4.70%, the highest level seen since January 2025.
Higher US bond yields have also strengthened the US Dollar. In the Asian trade, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades firmly near the three-week high at around 101.50 posted on Thursday.
India's private sector PMI growth cools down
India's flash HSBC Composite Purchasing Managers' Index (PMI) data for July arrives at 54.3, lower than 57.1 in June. A slowdown in both manufacturing and service sector activity has weighed on the overall PMI number.
"Renewed tensions in the Middle East have once again resulted in firms building buffers to manage the uncertainties around the longevity of the supply-side shock. Finished goods and input inventories increased alongside a pick-up in purchasing volumes. Both, output and new export orders rose, even as the overall manufacturing growth eased slightly. Price pressures firmed, with output charge inflation gathering pace and signalling a renewed push to protect margins," Pranjul Bhandari, Chief India Economist at HSBC, said.
Technical Analysis: USD/INR struggles to revisit all-time high at 97.10
USD/INR trades lower at around 96.50, but is holding its advance above the 20-day Exponential Moving Average (EMA) at 95.9678 and keeping a constructive bullish bias intact.
The positioning over this short-term trend gauge suggests dips are being absorbed, while the Relative Strength Index (RSI) around 61 points to firm but not yet overbought upside momentum.
On the downside, immediate support is located at the 20-day EMA near 95.97, where buyers would be expected to defend the uptrend on pullbacks. Looking up, the all-time high at around 97.10 will be the key resistance level
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
HSBC Composite PMI
The Composite Purchasing Managers Index (PMI), released on a monthly basis by S&P Global and HSBC Bank, is a leading indicator gauging business activity in India This d by weighting together comparable manufacturing and services indices using official manufacturing and services annual value added. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the Indian private economy is generally expanding, a bullish sign for the Indian Rupee (INR). Meanwhile, a reading below 50 signals that the activity is generally declining, which is seen as bearish for INR.
Read more.Last release: Fri Jul 24, 2026 05:00 (Prel)
Frequency: Monthly
Actual: 54.3
Consensus: -
Previous: 57.1
Source: S&P Global
ING’s Chris Turner notes the US Dollar (USD) is supported as higher energy prices fuel expectations of further central bank tightening, with markets pricing more hikes from the European Central Bank (ECB) and Bank of England (BoE). While ING does not expect the Federal Reserve (Fed) to hike next week, Turner warns it is dangerous to fight the trend and sees US Dollar Index (DXY) potentially breaking above June’s 101.80 high.
Fed credibility and energy-driven support
"The dollar continues to perform well as high energy prices raise expectations for a central bank response."
"President of the ECB, Christine Lagarde, made it pretty clear yesterday that the central bank would be hiking in September, and markets now price a further 75bp of tightening for both the ECB and the Bank of England. That seems excessive, but is hard to fight unless energy prices turn sharply lower soon."
"Crucially – and after the June FOMC meeting – the market believes the Federal Reserve will have to respond as well. Since that June FOMC meeting, two-year real USD swap rates have risen 30bp as investors buy into the only message we have heard from the Fed – the need to restore credibility when it comes to fighting inflation."
"US data today is relatively light – just July S&P PMI readings and new home sales. But with US President Donald Trump threatening a fresh military onslaught on Iran, expect investors to hold onto their long dollar balances into the weekend. DXY is not far from June's 101.80 high and an upside break-out cannot be ruled out."
"While we do not think the Fed will hike next week, it remains very dangerous to fight this trend and, as we have been saying all week, we expect the dollar to outperform."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- GBP/USD returns to the 1.3320 area after rejection at 1.3340.
- Stronger-than-expected UK business activity and Retail Sales figures have failed to lift the Pound.
- The safe-haven US Dollar is trading higher across the board amid growing geopolitical risks and new trade tariffs
The British Pound (GBP) remains depressed near three-week lows against the US Dollar (USD) on Friday, with upside attempts capped below 1.3340, and on track for a 1% weekly decline. The upbeat UK Preliminary S&P Global Purchasing Managers Index (PMI) and Retail Sales reports failed to lift the Pound, heavily weighed by risk-averse markets and increasing fiscal concerns in the UK.
Preliminary data for July revealed that UK business activity expanded beyond expectations in both the manufacturing and services sectors. The S&P Global Manufacturing PMI rose to 52.8. from 52.5 in June, against market expectations of a slowdown to 52.0. The Services PMI returned to expansion levels at 51.8 in July from 48.8 in June, also beating market expectations of a milder improvement to 49.4.
A few hours earlier, data released by National Statistics showed an unexpected 1% increase in retail consumption in June, beating the market consensus, which had anticipated a 0.3% decline. Year-over-year, Retail Sales increased 4.2%, almost twice the 2.3% increment forecasted by market experts.
UK data, however, has failed to offset the US Dollar's strength amid the risk-averse market mood. Reports of attacks on Saudi vessels in the Red Sea have pushed Brent Oil to levels near $100, fuelling inflationary concerns across the globe and sending US Treasury yields to multi-month highs. If that was not enough, the Trump administration announced new tariffs of 10 to 12% on 60 trading partners, including the UK, as temporary 10% global tariffs expire, further souring investors' sentiment.
Sterling strength seen on weak foundations
The Sterling, on the other hand, has been suffering from weaknesses of its own this week, with investors growing increasingly wary that Prime Minister Andrew Burnham’s spending plans might endanger the UK's fiscal stability.
In that sense, analysts at ING argue that the recent bout of Pound strength is unlikely to prove durable, stressing that “Sterling’s rally has been driven more by positioning, carry and potentially some M&A flows than by a lasting improvement in UK fundamentals.”
ING experts warn that “Sterling’s summer rally (...) looks to be built on weak foundations,” with “UK short-dated rates likely to drift lower and fiscal risks set to return ahead of the autumn.” Against that backdrop, ING expects “sterling to hand back recent gains.”
Economic Indicator
S&P Global Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for GBP.
Read more.Last release: Fri Jul 24, 2026 08:30 (Prel)
Frequency: Monthly
Actual: 52.8
Consensus: 52
Previous: 52.5
Source: S&P Global
Economic Indicator
S&P Global Services PMI
The Services Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for GBP.
Read more.Last release: Fri Jul 24, 2026 08:30 (Prel)
Frequency: Monthly
Actual: 51.8
Consensus: 49.4
Previous: 48.8
Source: S&P Global
Forex Market News
Our dedicated focus on forex news and insights empowers you to capitalise on investment opportunities in the dynamic FX market. The forex landscape is ever-evolving, characterised by continuous exchange rate fluctuations shaped by vast influential factors. From economic data releases to geopolitical developments, these events can sway market sentiment and drive substantial movements in currency valuations.
At Rakuten Securities Hong Kong, we prioritise delivering timely and accurate forex news updates sourced from reputable platforms like FXStreet. This ensures you stay informed about crucial market developments, enabling informed decision-making and proactive strategy adjustments. Whether you’re monitoring forex forecasts, analysing trading perspectives, or seeking to capitalise on emerging trends, our comprehensive approach equips you with the insights needed to navigate the FX market effectively.
Stay ahead with our comprehensive forex news coverage, designed to keep you informed and prepared to seize profitable opportunities in the dynamic world of forex trading.
