Forex Today: Sterling sell-off extends, BOJ warns, and trade talks resume

Here is what you need to know on Tuesday, July 30th, European session:
- GBP/USD has extended its dramatic slump and hit the 1.21 handle, trading at the lowest since January 2017. PM Boris Johnson's refusal to meet his European counterparts if they refuse to renegotiate the Brexit accord is weighing heavily on the pound. The EU refuses to budge. Johnson's senior minister Michael Gove previously said that the prospects of a no-deal Brexit are "very real." – Setting off the downfall.
- The Bank of Japan has left its policies unchanged as expected but warned about growing risks to the economy and lowered its growth and inflation forecasts, hinting about monetary stimulus later on this year. The BOJ may be waiting for the Federal Reserve, similar to the European Central Bank's announcements last week.
- The Fed begins its two-day meeting today ahead of a highly-anticipated rate cut due on Wednesday. A standard 25bp rate reduction is the base case as a means to mitigate lower inflation and trade tensions. The world's most powerful central bank is unlikely to signal further stimulus as other economic indicators look upbeat. Core PCE for June will provide another input for the Fed.
- The US and China are beginning their face-to-face trade talks at a dinner in Beijing. China has called the US to meet it halfway and compromise. Political analysts are skeptical that a deal can be done anytime soon.
- French GDP missed expectations with an increase of only 0.2% in the second quarter. Preliminary German inflation numbers are due later.