Forex News
BNY Mellon’s Geoff Yu notes that reduced Bank of England (BoE) tightening expectations are not undermining the British Pound (GBP). He argues that BoE flexibility around its mandate and reluctance to overreact to supply shocks is not hurting GBP, with consistent domestic Gilt demand and positive real rates offset by international concerns about United Kingdom (UK) growth and politics.
Rate repricing leaves Pound resilient
"In the U.K. and GBP’s case, whether rates are the dominant driver is questionable, given the volume of political noise still weighing on the economy. Bank of England (BOE) Governor Andrew Bailey has credited market rate moves with “doing the tightening for the BOE” and appears clearly skeptical of using further hikes to address a supply shock."
"Compared with the ECB, we believe the BOE’s flexibility around its price stability mandate is a deliberate choice that isn’t currently damaging the currency."
"The Monetary Policy Committee can’t fix the U.K.’s structural issues, but it can avoid making them worse. Asset allocation to the U.K.’s equity market differs greatly from the Eurozone due to global exposures."
"Energy-driven supply shocks could even prove beneficial to GBP on the margins. Gilt yields also matter, but our flow data show that domestic purchases have been highly consistent due to positive real rates."
"It’s the international component that’s currently limiting GBP’s potential, mostly due to concerns over potential growth and politics."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- EUR/GBP treads water around 0.8530, a few pips above one-year lows, at 0.8519.
- German Trade Balance surplus beat expectations in May, yet with no impact on the Euro.
- Rising geopolitical tensions and higher Oil prices are keeping Euro bulls subdued.
The Euro (EUR) keeps treading water right above one-year lows against the British Pound (GBP) on Thursday. The EUR/GBP is trading flat in the area of 0.8530 at the time of writing, weighed by rising tensions between the US and Iran and the rebound in oil prices.
In the Eurozone, German Trade Balance data beat expectations with a EUR 19.1 billion surplus in May, from the 14.5 billion surplus seen in April, as exports grew against expectations. The data, however, has failed to provide any significant support to the Euro.
Meanwhile, the US has launched a new round of attacks in Iran, which targeted US bases in Gulf countries in retaliation. US President Donald Trump said on Wednesday that the ceasefire was over, and Crude prices have bounced up nearly10% with Brent Oil hitting the $80 level on Wednesday, after bottoming near $70.00 last week.
Technical Analysis: EUR/GBP bears have lost momentum
EUR/GBP shows a bearish near-term tone, although sellers seem to have lost momentum. The Relative Strength Index (14), now near 28, highlights a bullish divergence, while the Moving Average Convergence Divergence (MACD) indicator stabilizes around the zero line, hinting at consolidation rather than a decisive bullish reversal.
Bulls, however, must break above the previous yearly low, at 0.8533 (Jul 7 low), and the top of the descending wedge pattern from mid-June highs, now around 0.8555, to confirm a bullish correction.
On the downside, below the mentioned Wednesday's low at 0.8519, the confluence of the wedge bottom and late June 2025 lows, just above 0.8500, is likely to test bulls. Further down, there is no clear support until the early June 2025 lows, in the area of 0.84100.8863.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | -0.46% | 0.65% | -0.20% | -0.03% | -0.32% | 0.38% | |
| EUR | -0.03% | -0.51% | 0.61% | -0.26% | -0.03% | -0.39% | 0.30% | |
| GBP | 0.46% | 0.51% | 1.00% | 0.26% | 0.47% | 0.13% | 0.82% | |
| JPY | -0.65% | -0.61% | -1.00% | -0.87% | -0.55% | -0.93% | -0.28% | |
| CAD | 0.20% | 0.26% | -0.26% | 0.87% | 0.30% | -0.07% | 0.56% | |
| AUD | 0.03% | 0.03% | -0.47% | 0.55% | -0.30% | -0.36% | 0.33% | |
| NZD | 0.32% | 0.39% | -0.13% | 0.93% | 0.07% | 0.36% | 0.69% | |
| CHF | -0.38% | -0.30% | -0.82% | 0.28% | -0.56% | -0.33% | -0.69% |
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).
Commerzbank’s Thu Lan Nguyen argues that recent US policy towards Iran has reversed market expectations of a rapid normalisation in Gulf energy supplies, challenging earlier pricing of an Oil supply glut. With the Iran deal apparently called off by President Trump, she notes that Middle East risks remain unresolved, implying a renewed risk premium and potential volatility in energy prices.
US stance revives supply risk
"Over the past few days we had expressed scepticism about the rapid decline in the oil price, not least because shipping traffic through the Strait of Hormuz has picked up but still remains well below pre-war levels. The market, however, appeared to look straight through this and was already pricing in supply glut on the oil market."
"It turns out that the US administration shares our sceptical assessment of the oil supply situation rather than the market’s. And since Washington felt that the normalisation of energy supplies from the Gulf region was not proceeding quickly (and smoothly) enough, the deal with Iran has apparently been called off, according to US President Trump."
"Of course, this does not necessarily mean that the situation in the Middle East has to escalate again immediately. Trump’s harsh threats may merely be strategic sabre‑rattling intended to force the Iranian side into making concessions more quickly. Moreover, talks are likely to be continuing behind the scenes. The last word has by no means been spoken."
"But this episode is likely to show the market that it cannot consider the conflict to be over as long as the parties have not agreed on a final peace settlement. This, in turn, means that market participants will, for the time being, have to factor in a higher risk premium again, associated with potentially renewed price swings in energy prices."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
United Overseas Bank’s (UOB) Quek Ser Leang highlights that EUR/USD momentum has flattened, with the Euro expected to trade between 1.1395 and 1.1440 intraday. Over 1–3 weeks, the pair is seen in a broader 1.1360–1.1450 range-trading phase. On a 1–3 month view, a break of the 1.1390/1.1410 support zone would target 1.1210.
Euro-Dollar locked in range phase
"24-HOUR VIEW: EUR fell to a low of 1.1407 on Tuesday. Yesterday, we highlighted the following: “Despite the relatively sharp decline, downward momentum has not increased much. However, there is scope for EUR to dip below 1.1390. The major support at 1.1360 is unlikely to come into view. Resistance is at 1.1420; a breach of 1.1430 would indicate that the immediate downward pressure has eased.” EUR subsequently declined and printed a low of 1.1390 before recovering to close largely unchanged at 1.1414 (+0.03%). Momentum indicators are turning flat, and today, we expect range-trading, most likely between 1.1395 and 1.1440."
"1-3 WEEKS VIEW: Last Friday (03 Jul, spot at 1.1430), we highlighted that “the bias for EUR is tilted to the upside.” After EUR fell sharply two days ago, we highlighted yesterday (08 Jul, spot at 1.1405) that “upward momentum has largely faded, and EUR has likely moved back into a rangetrading phase, and we expect it to trade between 1.1360 and 1.1450 for now.” There is no change in our view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The Australian Dollar edges up against the US Dollar despite multiple headwinds.
- Middle East war may last longer due to US attacks on Iranian infrastructure.
- The FOMC minutes show that several policymakers see the need for monetary policy tightening.
The Australian Dollar (AUD) trades marginally higher at around 0.6935 against the US Dollar (USD) during the European trading session on Thursday. The Aussie pair edges up as the US Dollar ticks lower despite escalating Middle East risks and hawkish Federal Open Market Committee (FOMC) Minutes of the June policy meeting.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.13% lower to near 100.92.
The attacks on Iranian infrastructure by United States (US) military forces signal that the restart of the war would last long, a scenario that might keep oil prices higher and the appeal of safe-haven assets upbeat. According to Axios, the US Air Force bombed two railway bridges in Iran on Wednesday.
Meanwhile, the FOMC Minutes showed on Wednesday that policymakers are concerned about upside inflation risks and several of them see the need to tighten monetary conditions to ease price pressures.
In the Australian region, traders might consider raising hawkish Reserve Bank of Australia (RBA) bets again as Assistant Governor Sarah Hunter has reiterated that the central bank would act, if needed, for inflation to return to target and maintain sustainable full employment.
Lately, traders pared hawkish RBA bets as the Australian monthly Consumer Price Index (CPI) has cooled down in the last two months.
AUD/USD technical analysis
AUD/USD trades slightly higher at around 0.6936, but maintains a bearish near-term tone as it remains below the 20-period exponential moving average (EMA) at 0.6963.
The pair has been unable to reclaim this short-term trend proxy, suggesting that rallies are likely to be capped while price holds under the EMA. The Relative Strength Index (RSI) at 41.46 stays below the midline, hinting at persistent, though not extreme, selling pressure.
On the topside, initial resistance is defined by the 20-period EMA at 0.6963, which is the first level bulls would need to overcome to ease the current downside bias. Above the moving average, the next resistance for the pair will be the psychological level of 0.7000. Looking down, the June low at 0.6865 is the key support level; a break below that would expose the pair to the March low at 0.6833.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Last release: Wed Jul 08, 2026 18:00
Frequency: Irregular
Actual: -
Consensus: -
Previous: -
Source: Federal Reserve
Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.
- GBP/USD gathers strength to near 1.3405 in Thursday’s early European session.
- The pair maintains constructive bias, with a mildly bullish RSI momentum.
- The first upside barrier emerges at 1.3470; the initial support level to watch is 1.3300.
The GBP/USD pair trades in positive territory around 1.3405 during the early European trading hours on Thursday. Fading political uncertainty in the United Kingdom (UK) provides some support to the British Pound (GBP) against the US Dollar (USD).
Following the resignation of Keir Starmer in late June, UK political risk has eased significantly. The formal race to replace outgoing Prime Minister Keir Starmer begins on July 9. Frontrunner Andy Burnham is widely expected to become Prime Minister by July 20.
Technical Analysis:
In the daily chart, GBP/USD holds a mildly bullish near-term bias as price sits above the Bollinger middle band and the 100-day simple moving average (SMA). The pair is pressing the upper half of the recent range, with the Bollinger Bands (20, 2) still widening modestly, while the Relative Strength Index (14) at 57.6 suggests constructive but not overextended upside momentum.
On the topside, initial resistance is aligned with the Bollinger upper band at 1.3470, where buyers could hesitate. On the downside, immediate support is provided by the Bollinger middle band near 1.3300, while a deeper pullback would likely be contained by the Bollinger lower band around 1.3130.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- The Indian Rupee rises against the US Dollar even as oil prices remain higher.
- US President Trump confirmed that the MoU with Iran is over.
- Hawkish FOMC minutes fail to support the US Dollar.
The Indian Rupee (INR) opens higher against the US Dollar (USD) on Thursday. The USD/INR pair drops to near 95.44 as the US Dollar ticks lower; however, the outlook of the pair remains bullish as renewed Middle East hostilities have boosted oil prices.
The higher oil prices narrative is unfavorable for the Indian Rupee, as currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform in a high-oil price environment.
In the opening trade, the MCX Crude Oil contract expiring on July 20 holds onto Wednesday’s gains near Rs.7,115. The MCX Crude Oil contract has gained over 10% from its multi-month low of Rs. 6,505 posted last week.
US-Iran MoU collapses
On Wednesday, United States (US) President Donald Trump announced that the memorandum of understanding (MoU) signed with Iran, aimed at ending the Middle East war, is over, after the exchange of attacks between both nations. The US Central Command launched a series of attacks on Iran’s military infrastructure on Tuesday after Tehran struck three commercial ships transiting through the Strait of Hormuz, a critical chokepoint to almost 20% of global energy supply.
Meanwhile, Middle East hostilities have increased as US military forces have started attacking Iranian infrastructure. Earlier in the day, Iranian state media reported that multiple US artillery shells struck a railway bridge west of Aghala in Golestan, triggering several explosions.
US Dollar drops despite hawkish FOMC minutes
The US Dollar trades marginally lower even as Federal Open Market Committee (FOMC) Minutes of the June policy meeting on Wednesday showed that policymakers continue to see “inflation as the dominant risk”. The minutes also showed that several officials believe further tightening could become necessary.
At press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, ticks lower to near 100.95.
FIIs continue to raise stake in Indian stock market
Foreign Institutional Investors (FIIs) continue to increase their stake in the Indian stock market despite renewed geopolitical risks. Overseas investors have remained net buyers in all last four trading days, and have raised their stake worth Rs. 3,954.35 crore.
Technical Analysis: USD/INR rises to near 95.50
USD/INR trades lower at around 95.44 at press time. However, the pair holds a bullish near-term bias as spot hovers above the 20-day exponential moving average (EMA) at 95.10. The pair is also holding the breakout of the Descending Triangle formation, while the Relative Strength Index (RSI) at 54.7 hints at moderately positive momentum rather than overbought conditions.
On the downside, initial support is seen at the 20-day EMA around 95.10, followed by the May 7 low at 94.03. On the topside, the next significant obstacle aligns with the descending resistance trendline starting near 97.08, which caps the broader advance and would need to be overcome to sustain a stronger bullish extension.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
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