Forex Today: Will the BoE dare?

Pablo Piovano FXStreet

The unexpected rate hike by the BoJ surprised the FX world on Wednesday, while the Fed left its policy rate unchanged, although it signaled a potential rate cut in September. Next on tap comes the BoE, with odds split regarding a probable rate reduction.

Here is what you need to know on Thursday, August 1:

The USD Index (DXY) suffered the BoJ-driven strength in the Japanese yen and the somewhat dovish message from Chief Powell after the Fed left rates unchanged, as anticipated. On August 1, the ISM Manufacturing PMI takes centre stage along with usual Initial Jobless Claims, Construction Spending and the final S&P Global Manufacturing PMI.

EUR/USD reversed part of the weekly retracement, revisiting once again the 1.0850 region. The final HCOB Manufacturing PMI in Germany and the EMU are due on August 1 seconded by the ECB Economic Bulletin and the Unemployment Rate in the euro bloc.

GBP/USD printed modest gains around 1.2850 amidst steady prudence pre-BoE and the weaker Dollar. On August 1, the BoE will decide on its policy rate. Additionally on the UK calendar, Nationwide Housing Prices are due followed by the final S&P Global Manufacturing PMI.

The surprising rate hike by the BoJ prompted USD/JPY to retreat sharply and breach the key 150.00 support, printing fresh four-month lows. On August 1, the only release of note in Japan will be the weekly Foreign Bond Investment figures.

AUD/USD lost further ground and broke below the 0.6500 support, opening the door to further losses in the very near term. The final Judo Bank Manufacturing PMI is expected on August 1 along with the Balance of Trade figures.

Finally, some respite for WTI prices came on the back of rising geopolitical concerns and another drop in weekly US crude oil inventories, all lifting prices back to the vicinity of the $78.00 mark per barrel.

Prices of Gold added to Tuesday’s advance and retested the $2,440 region per ounce troy. Silver followed suit, posting gains for the second straight session and approaching the $29.00 mark per ounce.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD drops to daily lows near 1.1630

EUR/USD now loses some traction and slips back to the area of daily lows around 1.1630 on the back of a mild bounce in the US Dollar. Fresh US data, including the September PCE inflation numbers and the latest read on December consumer sentiment, didn’t really move the needle, so the pair is still on course to finish the week with a respectable gain.

GBP/USD trims gains, recedes toward 1.3320

GBP/USD is struggling to keep its daily advance, coming under fresh pressure and retreating to the 1.3320 zone following a mild bullish attempt in the Greenback. Even though US consumer sentiment surprised to the upside, the US Dollar isn’t getting much love, as traders are far more interested in what the Fed will say next week.

Gold makes a U-turn, back to $4,200

Gold is now losing the grip and receding to the key $4,200 region per troy ounce following some signs of life in the Greenback and a marked bounce in US Treasury yields across the board. The positive outlook for the precious metal, however, remains underpinned by steady bets for extra easing by the Fed.