Bank of England steps up talks on negative interest rates amid uncertain outlook

Abhishek Goenka IFA Global

The BoE kept rates unchanged but said it was mulling how to implement negative rates effectively. This has brought markets' expectations of negative rates forward. It is very likely the BoE would expand asset purchases and cut rates into negative territory if a deal with EU is not reached. Unprecedented monetary policy support would be needed to support the economy from twin stresses of COVID and no deal Brexit. The BoE also said it would refrain from hiking rates until inflation sustainably reached its 2% target. The Pound weakened post the BoE policy. Yield on UK 6 month bills hit a new record low of -0.04%. However, the Pound recovered later on broad USD weakness.

US jobless claims in line with expectations at 860k. Continuing claims also came in better than expected at 12.6mn (exp 13mn) but nevertheless continue to remain elevated.

The RBI bought bonds aggressively in the OMO twist with cut off coming in way below market yields (RBI bought bonds at higher prices compared to market). The RBI also announced an outright OMO for 10000crs. The RBI is sending a signal across but market participants are still wary of taking duration ahead of the announcement of H2 borrowing calendar on 30th Sep and RBI monetary policy on 1st Oct.

USD/INR continues to trade an extremely tight range. There are inflows but the RBI has been absorbing them. Until we see the next leg of USD weakness, the RBI may not step aside to let the Rupee readjust. We may continue to see the Rupee in 73-74 range until then. Over the next couple of sessions, we are likely to see inflows to the tune of USD 1bn on account of FTSE index rebalancing. USDINR is likely to trade 73.35-73.65 range.

Strategy: Exporters are advised to cover confirmed order on upticks or go for risk reversal strategy. Importers are advised to hold. The 3M range for USDINR is 72.50 – 74.50 and the 6M range is 72.50 – 75.40.

Download The Full Daily Currency Insight

Author

Abhishek Goenka

IFA Global

Mr. Abhishek Goenka is the Founder and CEO of IFA Global. He pilots the IFA Global strategic direction with a focus on relentlessly improving the existing offerings while constantly searching for the next generation of business excellence.

USD/JPY keeps range above 160.00 after BoJ's rate hike

USD/JPY holds losses and maintains its range above 160.00 on Tuesday, following the release of the Bank of Japan monetary policy decision. The BoJ hiked the key rate by 25 bps to 1% as widely, providing little to no impetus to the Japanese Yen. The focus is now on the BoJ' Uchida's press conference.

AUD/USD holds lower ground near 0.7050 after RBA's expected pause

AUD/USD shows little reaction to the Reserve Bank of Australia's (RBA) expected decision to pause its rate hike cycle, remaining close to intraday lows near 0.7050 on Tuesday. The pair now looks forward to RBA Governor Bullock's press conference for further policy cues.

$4,400: Gold sellers set to retain control whilst below this level; focus shifts to Fed

Gold holds a pullback from six-day highs of $4,369 as buyers take a breather early Tuesday. The US Dollar looks to fill Monday’s bearish opening gap as markets temper Iran deal optimism. Technically, Gold remains exposed to downside risks whilst below the 21-day SMA near $4,400.

Bitcoin weighs BOJ rate hike to 1%, Uniswap and LayerZero sustain

Bitcoin is holding above $65,000 at press time on Tuesday as the Bank of Japan (BOJ) raises its interest rate to 1%, shifting focus away from the US-Iran peace agreement. Uniswap (UNI) and LayerZero edge lower on Tuesday but outpace the broader market over the last 24 hours as the retail sentiment recovers.

Kevin Warsh opens first Fed meeting June 16 with rate hold expected

Kevin Warsh was confirmed by the Senate in a 54-45 vote and sworn in as Federal Reserve Chair on 22 May 2026. The ceremony took place at the White House, with Supreme Court Justice Clarence Thomas administering the oath. The FOMC meeting on 16 and 17 June is his first as chair. The June meeting is also a quarterly projection meeting.

4.2% headline, 0.2% core: Why the Fed's next hike may be targeting the wrong problem

May's CPI put headline inflation at 4.2% on the year, up from 3.8% in April and the hottest reading since April 2023, while core prices rose just 0.2% on the month, undershooting the 0.3% consensus and halving April's pace.