Forex News

• GBP/USD edges slightly higher on Monday but struggles to hold above the 1.3500 level.
• Weak US employment figures released on Friday continue to weigh on the US Dollar.
• Investors now await US inflation data and UK GDP figures later this week.

GBP/USD trades around 1.3495 on Monday at the time of writing, up a modest 0.04% on the day. However, the pair struggles to hold firmly above the psychological 1.3500 level after benefiting on Friday from a decline in the US Dollar (USD) triggered by disappointing United States (US) employment data.

The Nonfarm Payrolls (NFP) report released on Friday showed that the US economy lost 23K jobs in July. The figures fuel concerns about a slowdown in the US labor market and reduce expectations of monetary tightening by the Federal Reserve (Fed).

Markets now see less than a 45% chance of a Fed interest-rate hike in September, down from around 67% a week earlier. This shift in expectations limits the US Dollar's ability to rebound and allows GBP/USD to remain close to its recent highs.

The Greenback nevertheless attempts to stabilize on Monday, supported by persistent geopolitical uncertainty in the Middle East and around the Strait of Hormuz. The prospect of a recovery in Oil prices could also keep inflationary pressures elevated in the US and preserve the possibility of another Fed rate hike later this year.

Investors' attention therefore turns to upcoming US inflation figures, which could provide fresh clues about the interest-rate outlook. Higher-than-expected inflation could revive hawkish Fed expectations and support the US Dollar, while easing price pressures could reinforce the recent momentum in GBP/USD.

On the United Kingdom (UK) side, investors await the preliminary Gross Domestic Product (GDP) estimate for the second quarter on Thursday. The UK economy is expected to expand by 0.4% in the second quarter, slowing from 0.6% previously. On a monthly basis, GDP is expected to decline by 0.1% in June after rising by the same amount in May. A surprise in these figures could determine whether the British Pound (GBP) has enough support for GBP/USD to establish a more sustained move above 1.3500.

GBP outlook hinges on Q2 UK GDP as markets price further BoE tightening

Strategists at Brown Brothers Harriman expect UK growth momentum to cool in the coming quarter, noting that “UK real GDP growth [is set] to slow in Q2,” with Thursday’s release seen showing activity expanding “0.4% q/q vs. 0.6% in Q1.” They highlight that the BoE is even more cautious, as “the Bank of England (BoE) projects a softer print of 0.3% q/q as lower household real income growth, and tighter financial conditions weigh on domestic demand activity,” and that “the BoE forecasts consumption growth to ease to 0.3% q/q in Q2 vs. 0.6% in Q1.”

Against this backdrop, BBH warns that “absent a GDP beat, UK rate pricing looks vulnerable to a dovish repricing against GBP,” given that “the swaps curve continues to imply 50bps of BoE tightening to 4.25% in the next twelve months.” They stress that such an outcome “would leave the policy rate above the BoE’s estimated neutral range (2.00%-4.00%) when the UK economy is operating well below potential.”

GBP/USD technical analysis

In the one-hour chart, GBP/USD trades at 1.3496. The pair holds a mild bullish bias as it trades above the 100-period simple moving average (SMA) around 1.3461 and the 200-period SMA near 1.3432, while supported by an upward support currently around 1.3440. The Relative Strength Index (RSI) hovering just above 60 hints at firm but not overstretched upside momentum, suggesting dips into nearby support may attract buyers as long as the price stays anchored above the shorter and longer-term SMAs.

On the topside, immediate resistance emerges at the horizontal barrier near 1.3509, with a subsequent cap seen around 1.3558 if bulls extend the advance. On the downside, the first line of defense is the 100-period SMA at 1.3461, followed by the trend-line around 1.3440 and then the 200-period SMA near 1.3432, where a break lower would weaken the current constructive tone and expose deeper retracements.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Nomura’s Josie Anderson, George Buckley and Andrzej Szczepaniak expect Norges Bank to keep its policy rate at 4.25% at the August meeting, citing softer underlying inflation and benign domestic data. They see the key issue as future guidance on further hikes this year, with downside CPI-ATE surprises reducing the probability of additional tightening while rate cuts remain off the table.

Norges Bank seen on extended hold

"We expect Norges Bank to leave its policy rate unchanged at 4.25% at its August policy meeting. Underlying inflation unexpectedly slowed in June to 2.7% y-o-y, its first time below 3% since May 2025, and also remained at that rate in today’s data for July (against our and consensus expectations of a slight re-acceleration). This slower rate of inflation is the key reason why we expect Norges Bank to leave its policy rate unchanged despite signalling the possibility of a hike at its last meeting."

"The June minutes said that “some members expressed concern that the stance is not sufficiently restrictive to bring inflation down and argued in favour of raising the policy rate now”, which prompted us to bring forward our expectation of the next rate rise to August from September. However, the soft inflation data since then now suggest an August hike is unlikely."

"A key issue at this week’s meeting will be whether Norges Bank continues to signal that another hike is likely. It will not update its forecasts or policy rate projections in August. However, it may note that the inflation outturns since the June projection have meant the monetary policy outlook has changed, and a rate hike is now less likely than was suggested at the last meeting."

"Overall, we expect Norges Bank to leave its policy rate unchanged at its August meeting, as concerns about sticky inflation have likely eased. In our view, today’s second consecutive downside CPI-ATE inflation surprise has also lowered the probability of a September hike. We therefore think Norges Bank’s guidance could signal a lower likelihood of a second rate hike this year than was suggested in June, but that uncertainty remains very high."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

ING’s Frantisek Taborsky highlights a busy Central and Eastern Europe calendar with Czech inflation, Turkey’s inflation report and key Polish data, including GDP and core inflation. He notes CEE assets remain driven by global headlines, higher Oil prices and narrowing rate differentials, with EUR/CZK in focus after closing above 24.250 and seen with upside risk toward 24.300.

Global factors steer regional FX

"Outside Romania’s busy calendar, the rest of the CEE week brings final Czech inflation on Tuesday, with headline CPI expected to be confirmed at 1.7% and the focus on core inflation, which we see unchanged around 2.8-2.9%."

"On Thursday, Turkey’s central bank will publish its inflation report, while Poland will release final CPI, likely confirming 3.0%, alongside 2Q GDP. We estimate Polish GDP growth accelerated to 3.8% YoY from 3.5% YoY in 1Q26, despite a further slowdown in private consumption, as investment growth gained momentum."

"CEE markets remain mainly driven by global headlines. With no progress in US-Iran talks over the weekend, we expect a mixed open, especially after Friday’s regional rates rally following US jobs data."

"Higher oil prices could trigger some correction, while last week’s narrowing in rate differentials may put pressure on CEE currencies this morning. EUR/CZK remains in focus after closing above 24.250 on Friday, in line with our post-Czech National Bank meeting call, though we still see upside risk closer to 24.300."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Societe Generale strategists highlight that EUR/USD has squeezed above key resistance as Dollar weakness follows softer United States (US) employment data and reduced odds of a September Fed hike. The pair is seen slightly expensive versus nat gas but near fair value on 2-year spreads. They note that if the European Central Bank (ECB) hikes again while the Federal Reserve (Fed) pauses, EUR/USD could gain further, with the next resistance zone identified around 1.1610/1.1625.

Euro prospects improve as Fed bets are repriced

"Clouds first appeared on the horizon for the dollar two weeks ago after the coordinated FX intervention in USD/JPY and the squeeze in EUR/USD above key resistance at 1.1475/1.15."

"The pricing for a hike in September has been whittled back to less than 50% vs 72% at the end of July. "

"After months of obsessing about above target CPI and PCE inflation, and levelling accusations of being behind the curve, the employment situation put the Fed outlook in a different daylight and raises questions for the direction of the bond and FX markets in 2H."

"The pair trades close to fair value based on 2y spreads but is a smidgen expensive relative to nat gas."

"If the ECB hikes again and the Fed stands pat because of the deteriorating labour market, perspectives will emerge for a stronger EUR/USD ahead."

"We identify the next hurdle at 1.1610/1.1625."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Brown Brothers Harriman’s Elias Haddad notes that the Australian Dollar (AUD) remains one of the most attractive G10 currencies thanks to favorable carry and a hawkish Reserve Bank of Australia (RBA). The RBA is expected to keep rates at 4.35% while reiterating its readiness to hike if needed, with futures pricing about a 50% chance of one more 25 bps increase by year-end.

RBA stance underpins Australian Dollar carry

"Favorable interest rate carry in Australia and Norway continue to make AUD and NOK two of the most attractive currencies across the majors. NOK and AUD rank first and second, respectively, on the G10 FX leaderboard year-to-date."

"The RBA is widely expected to keep the policy rate at 4.35% for a second straight meeting (Tuesday). The RBA is also poised to reiterate that it’s prepared to “increasing the cash rate further if needed” because inflation continues to exceed 3.0%."

"The RBA’s August Statement on Monetary Policy will shed light on the bank’s inflation and growth outlook."

"RBA cash rate futures imply about 50% odds of one final 25bps hike by year-end. The RBA has room to pause its tightening cycle."

"First, the RBA projects real GDP growth to be below potential over the next two years. Second, RBA cash rate at 4.35% currently sits near the top of the range of model-based estimates of the nominal neutral rate."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Silver prices (XAG/USD) rose on Monday, according to FXStreet data. Silver trades at $64.24 per troy ounce, up 1.08% from the $63.55 it cost on Friday.

Silver prices have decreased by 9.63% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 67.68 on Monday, down from 68.32 on Friday.

(An automation tool was used in creating this post.)

Michael Pfister at Commerzbank highlights a strong Canadian labour market and improving Gross Domestic Product (GDP), Purchasing Managers' Index (PMI) and exports as signs of real-economy recovery, but warns this is fragile due to threatened US tariffs. Pfister expects a United States-Mexico-Canada Agreement (USMCA) extension to be agreed and remains optimistic that the Canadian Dollar (CAD) will appreciate over coming months, albeit with setbacks driven by US trade policy.

Stronger data but trade tensions linger

"In contrast to the US labour market, the Canadian labour market delivered a very positive surprise on Friday. While the median Bloomberg consensus forecast had predicted the creation of 20,000 new jobs, roughly 75,000 were actually created. In light of these figures, the unemployment rate also fell unexpectedly to 6.4%, its lowest level in two years, marking a decline of half a percentage point over the past three months."

"It almost seems as if the Canadian real economy is slowly recovering from the problems in its relationship with the US. However, this recovery is on shaky ground. The US president has announced new tariffs of 50% on certain Canadian goods if no agreement is reached by August 19th."

"We nevertheless continue to expect that an agreement on a one-year extension of USMCA will ultimately be reached. Although the US president regularly claims that only Canada would benefit from it, the two economies are too closely intertwined for a possible termination not causing major problems. But it is clear that any diversification by Canada away from its largest trading partner, the US, will be a lengthy process."

"We remain optimistic that the Canadian dollar will finally start to appreciate again in the coming months, but it will likely be a long road, with setbacks caused by the US president along the way."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Deutsche Bank strategists highlight that negotiations between Iran and Oman over a new shipping framework through the Strait of Hormuz remain finely balanced, with Tehran linking any lasting arrangement to broader demands on the US. Brent Oil has rebounded from midweek lows but still ended last week sharply lower, as markets priced partial de-escalation in Middle East tensions.

Hormuz negotiations steer Oil risk

"The appointment of former Revolutionary Guard commander Mohsen Rezaee to head the Supreme National Security Council reinforces hard-line influence at the centre of decision-making, even as Iranian officials insist they are close to an agreement with Oman on a new shipping framework through the Strait of Hormuz."

"Foreign Minister Abbas Araghchi has described the talks as being in their final stages, but Tehran has stressed that any technical agreement on shipping routes would not by itself lead to a full reopening of the waterway."

"Reuters and other major outlets report that Iran continues to tie any lasting Hormuz arrangement to wider demands on the US, including sanctions relief, compensation for war damage and security guarantees."

"Investors priced de-escalation in Middle East tensions as negotiations between Iran and Oman progressed, though some of that optimism then faded as details of a potential agreement on Thursday raised questions over whether the US would accept the deal and just how free-flowing shipping through the Strait of Hormuz would be."

"Brent crude rebounded from lows of around $78/bbl on Wednesday, it still finished the week down -7.29% to $83.55/bbl (+1.29% on Friday)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• NZD/USD trades around 0.5895 on Monday, virtually unchanged on the day.
• Middle East tensions support the US Dollar despite signs of weakness in the labor market.
• The New Zealand central bank’s hawkish stance could limit Kiwi losses ahead of US inflation data.

NZD/USD trades around 0.5895 on Monday at the time of writing, virtually unchanged on the day. The pair consolidates below the 0.5900 level after retreating from its recent monthly high, as the US Dollar (USD) recovers some of the losses registered in the wake of disappointing United States (US) employment data.

The Nonfarm Payrolls (NFP) report released on Friday showed that the US economy unexpectedly lost 23K jobs in July. The previous month’s figure was also revised sharply lower to just 20K job additions from the 57K initially reported. The data points to a cooling labor market and initially weighed on the US Dollar by weakening the case for monetary tightening from the Federal Reserve (Fed).

However, the bearish reaction in the US Dollar fades as geopolitical tensions in the Middle East revive demand for safe-haven assets. Uncertainty surrounding the Strait of Hormuz remains elevated, while fresh attacks by Iran-backed Houthi militants against Saudi energy infrastructure keep concerns over energy supplies alive.

At the same time, higher Oil prices are reviving inflation concerns in the United States (US). Investors fear that energy-driven inflation could force the Fed to keep monetary policy restrictive for longer or even raise interest rates again. Expectations of tighter US monetary policy also help keep US Treasury bond yields elevated, providing additional support to the Greenback.

The international backdrop is also weighing on the New Zealand Dollar (NZD). Data released over the weekend showed that China’s annual Consumer Price Index (CPI) slowed to a six-month low in July, while the Producer Price Index (PPI) eased more sharply than expected. Weaker inflation in China fuels concerns about the world’s second-largest economy and weighs on antipodean currencies, including the Kiwi.

The downside in NZD/USD remains limited, however, by the hawkish stance of the Reserve Bank of New Zealand (RBNZ). The New Zealand central bank maintains a sufficiently restrictive bias to support the New Zealand Dollar and contain bearish pressure on the pair for now.

Investors now turn their attention to US inflation data due this week. The figures could provide fresh clues about the Fed’s interest-rate path as markets weigh a cooling labor market against the risk of renewed energy-driven inflation. Developments in the Middle East are also likely to remain an important driver of the US Dollar and, consequently, NZD/USD.

NZD/USD technical analysis

In the one-hour chart, NZD/USD trades at 0.5895, holding a modest bullish bias as it consolidates above the 100-period simple moving average (SMA) near 0.5879 and the 200-period SMA around 0.5863. The pair is grinding higher toward the horizontal resistance at 0.5909, while the Relative Strength Index (RSI) around 61 suggests firm but not overextended upside momentum, keeping buyers in control as long as price stays above the underlying moving average floor.

On the downside, immediate support is seen at the 100-period SMA around 0.5879, ahead of the 200-period SMA near 0.5863 and the horizontal level at 0.5860, which together define a broader demand band protecting the recent recovery. On the topside, a break above resistance at 0.5909 would open the door for a continuation of the advance, whereas repeated failure there would risk a pullback back toward the clustered supports below.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

ING’s Frantisek Taborsky says Romania’s unchanged Baa3 rating at Moody’s and prior Fitch decision should ease pressure after recent ROMGBs underperformance. He expects the National Bank of Romania (NBR) to keep rates at 6.50%, sees the first cut only in January 2027, and anticipates limited EUR/RON moves near 5.25 despite some scope for a short-term Romanian Leu (RON) rally.

Stable rating, delayed easing outlook

"Moody’s kept Romania’s rating at Baa3 with a negative outlook, following Fitch’s unchanged decision a week earlier. This should offer some relief after ROMGBs sold off by around 15bp at the long end last week, even as the rest of the region rallied."

"Today, the National Bank of Romania is expected to keep rates unchanged at 6.50%, and we see little reason for a shift in tone versus previous meetings, with our forecast still pointing to the first rate cut only in January 2027."

"EUR/RON remains anchored just below 5.25, and we expect limited movement given the NBR’s lack of room to tolerate additional inflation pressure. However, relief over the unchanged rating could support a RON rally today as buyers and carry trades return to the market."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)