BoE in focus after hawkish Fed

Frank Walbaum FX Strategies.Asia

Important news this week

Thu, 30th Jul, 13:00 CET UK BoE Interest Rate Decision.
Thu, 30th Jul, 14:30 CET US PCE Price Index.
Fri, 31st Jul, tentative JP BoJ Interest Rate Decision.

Hawkish Fed shakes markets despite a softer Dollar

Markets reacted cautiously following the latest FOMC meeting. While the US Dollar weakened after the announcement, the Federal Reserve maintained a hawkish stance, stressing that inflation remains too high and that interest rates may need to stay restrictive for longer. Policymakers continued to emphasize their data-dependent approach, signalling that easing policy is not imminent despite signs of moderating economic growth.
Equity markets sold off as investors reassessed the outlook for higher borrowing costs and tighter financial conditions. Most major FX pairs strengthened against the weaker Dollar, although the Australian Dollar underperformed as fading risk sentiment weighed on commodity-linked currencies. Gold and Silver also lost ground, with broad risk-off flows encouraging investors to reduce exposure across several asset classes despite the softer Dollar. Meanwhile, oil prices continued to move higher, supported by persistent geopolitical tensions and expectations that supply risks could remain elevated.

Market talk

Today's focus shifts to the Bank of England's interest rate decision, where markets widely expect rates to remain unchanged. While the decision itself is unlikely to surprise, traders will closely monitor the BoE's statement and Governor Bailey's comments for clues on inflation, wage growth, and the timing of future policy changes. Following the hawkish Fed, any indication that the BoE also intends to keep rates higher for longer could provide additional support for Sterling. Investors will continue to monitor incoming inflation and labor market data, while oil prices and geopolitical developments remain key drivers of overall market sentiment.

Tendencies in the markets

Equities weaker, USD weak, crypto sideways, oil stronger, Silver weak, Gold weak.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

GBP/USD retreats from weekly high vs firmer USD as focus shifts to BoE, US data

The GBP/USD pair struggles to capitalize on the previous day's strong move up to the weekly high and drifts lower during the Asian session on Thursday. Spot prices currently trade around mid-1.3300s, down over 0.10% for the day, and, for now, seem to have stalled the recovery move from a nearly four-week low, touched on Tuesday.

EUR/USD retreats below 1.1450 despite upbeat German GDP data

EUR/USD stays on the back foot and trades below 1.1450 in the European session on Thursday as the better-than-expected German GDP data fails to support the Euro. The US Dollar recovers ground on renewed Mideast hostilities and the hawkish Fed message. Traders now brace for preliminary readings of the second-quarter GDP from the Eurozone and the US.

Gold extends intraday rejection slide from $4,100

Gold extends its intraday rejection slide from the $4,100 mark and moves further away from a one-week high, touched the previous day. The US Dollar regains positive traction following Wednesday's post-FOMC decline and is seen as a key factor weighing on the commodity.

Mixed signals leave XRP and XLM at crossroads

Ripple and Stellar are trading at critical technical levels on Thursday. XRP has stabilized above the psychological $1.00 support, while XLM is testing support at $0.173. Traders should be cautious as mixed derivatives metrics keep the outlook uncertain for both altcoins. Derivatives data shows mixed sentiment among traders. CoinGlass’ long-to-short ratio for XRP reads 1.02 on Thursday.

Fed review: Reversing course (?)

At face value, the FOMC's 9-3 split decision hold was exactly in line with the expectations we laid out in our Fed preview - a divided hold, 22 July. We also named the three dissenters - Hammack, Logan and Kashkari - as the most likely hawks to support rapid tightening.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.