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GBP/USD Price At make or a break around 1.3500

  • GBP/USD trades lower to near 1.3470 as the British Pound faces selling pressure.
  • The BoE left interest rates unchanged at 3.75% on Thursday.
  • Market sentiment turns risk-on as oil prices fall significantly.

The British Pound (GBP) underperforms its major currency peers, trading 0.1% lower at around 1.3470 against the US Dollar (USD) during the early European trading session on Monday. The GBP/USD declines as traders reconsider Bank of England (BoE) interest rate expectations, following the monetary policy announcement on Thursday.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the Japanese Yen.

USDEURGBPJPYCADAUDNZDCHF
USD-0.09%0.04%-0.66%0.07%-0.15%-0.11%0.11%
EUR0.09%0.12%-0.60%0.16%-0.07%0.02%0.16%
GBP-0.04%-0.12%-0.67%0.01%-0.20%-0.09%0.06%
JPY0.66%0.60%0.67%0.66%0.42%0.53%0.65%
CAD-0.07%-0.16%-0.01%-0.66%-0.23%-0.13%-0.01%
AUD0.15%0.07%0.20%-0.42%0.23%0.09%0.29%
NZD0.11%-0.02%0.09%-0.53%0.13%-0.09%0.17%
CHF-0.11%-0.16%-0.06%-0.65%0.01%-0.29%-0.17%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Analysts at Deutsche Bank stressed that the BoE was not “edging towards a rate hike,” a message that prompted a swift reassessment in market pricing. They note that investors “dialed back expectations for BoE hikes,” with the implied probability of a September move dropping from 60% to 30%. In parallel, Deutsche Bank highlights that “31bps of hikes [were] priced by year-end (-11.4bps on the day),” underscoring how the latest policy signals have tempered the market’s conviction in further tightening this year.

Last week, the BoE left interest rates unchanged at 3.75%, with a 6-3 majority, and stated that interest rate hikes would be needed if Middle East risks persist and second-round effects of inflation start emerging.

However, BoE Governor Andrew Bailey signaled in the press conference that the current state of inflation is not as bad as it thought. “Encouraging that CPI is below where we thought it would be,” Bailey said.

Meanwhile, the market sentiment is favorable for riskier assets, as oil prices have declined significantly due to a renewed ceasefire between the United States (US) and Iran. As of writing, S&P 500 futures are up 0.6% to near 7,535, reflecting a risk-on mood.

GBP/USD technical analysis

GBP/USD trades lower at around 1.3475, but reflects a bullish near-term bias as it holds above the 20-period exponential moving average (EMA), which is at 1.3389. The pair is at a critical level of 1.3470 where it could extend the advance or face a bearish reversal.

The Relative Strength Index (RSI) at 59 keeps a positive bias without yet signaling overbought conditions on the daily chart.

On the downside, the 20-day EMA around 1.3389 should let sellers press the pair lower. Looking up, the psychological level of 1.3500 is the key hurdle for British Pound bulls; a decisive break above that would improve the odds of further upside towards the July high at 1.3558.

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EUR/USD Price – Gains traction above 1.1500, while remaining constrained below 100-day SMA

  • EUR/USD gains ground to around 1.1535 in Monday’s early Asian session. 
  • The bearish tone of the major pair prevails under the 100-day SMA. 
  • The initial support level is seen at 1.1530; the immediate resistance level to watch is 1.1570. 

The EUR/USD pair trades in positive territory near 1.1535 during the early European trading hours on Monday, bolstered by improved risk sentiment. The Euro (EUR) edges higher against the US Dollar (USD) after reports that US President Donald Trump had called off an attack on Iran and talks between the two sides would happen on Monday. Traders will closely monitor the developments surrounding US-Iran negotiations. 

Traders brace for the German Retail Sales data for June, which is due later on Monday. If the reports come in weaker than expected, this could drag the shared currency lower. On the US docket, the US ISM Manufacturing Purchasing Managers Index (PMI) data will be published. 

Chart Analysis EUR/USD

Technical Analysis:

In the daily chart, EUR/USD trades at 1.1533. The pair remains capped in the near term as spot holds below the 100-day simple moving average (SMA) at 1.1569, keeping the broader tone heavy despite the latest bounce. The Relative Strength Index (14) at 62.5 shows firm positive momentum, but with price still under the key trend average, this strength merely hints at a corrective rebound within a broader bearish backdrop.

On the downside, immediate support is aligned with the upper Bollinger Band at 1.1529, with the 20-day SMA middle band at 1.1430 and the lower band near 1.1331 marking deeper cushions if selling resumes. On the topside, a daily close above the 100-day SMA at 1.1569 would be needed to ease bearish pressure and open the way for a more sustained recovery toward higher levels.

Euro briefly lifted by French CPI as ECB commentary stays muted

Analysts at Scotiabank note that the Euro received “a modest lift” earlier in the session after French CPI data “came in well above expectations,” but stress that the support quickly faded as “the impact was short-lived as broader themes took hold.” They add that “comments from the ECB have been limited and the speaking calendar is empty over the next week or so,” leaving the currency largely to trade on prevailing macro drivers rather than fresh policy signals.

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Japanese Yen jumps as US-Japan confirm joint intervention, hint further action

  • USD/JPY falls to around 156.45 in Monday’s early European session. 
  • Japan and the US confirm a joint JPY-buying intervention, signal more action. 
  • Trump said Iran talks would resume Monday after calling off planned strikes. 

The USD/JPY pair tumbles to near 156.45 during the early European trading hours on Monday. The Japanese Yen (JPY) climbs amid speculation that Japanese authorities may have intervened to prop up the currency again after coordinated action between the US and Japan last week.

Japan’s Finance Minister Satsuki Katayama said on Monday that Japan and the United States (US) conducted coordinated Yen-buying intervention and will not hesitate to take further action, per Reuters. Katayama confirmed a rare bilateral action to halt the ‌JPY’s slide to fresh 40-year lows. 

Meanwhile, US Treasury Secretary Scott Bessent said that Washington wouldn’t hesitate to step into the market again. US President Donald Trump said on Sunday the US was helping Japan prop up the JPY as a sign of friendship and to help the world economy.

“It seems likely that authorities would intervene further in the coming days if the yen begins to unwind the recent move, as was the case in May of this year,” Goldman Sachs Group Inc. strategists including Kamakshya Trivedi wrote in a note. “We continue to think intervention is an effective tool for authorities to buy some time before fundamental factors turn more positive.”

Uncertainty in the Middle East remains high despite hopes of a breakthrough between the US and Iran. Bloomberg reported on Monday that Trump said that a new round of Iran talks would begin Monday afternoon after he cancelled a planned attack on Iran partially in response to pleas from US allies in the Middle East, including Saudi Arabia. 

However, Iranian officials said that Trump’s claim that Tehran had requested a pause “was nothing but a new lie.” Any signs of renewed escalation in the Middle East could boost the Greenback against the JPY in the near term.  

Yen seen as undervalued as Japan authorities urged to back firmer currency stance

Strategists at BNY Mellon note that official rhetoric is turning more supportive of the Yen, pointing out that U.S. Treasury Secretary Scott Bessent said on Thursday that the Japanese Yen “looks very undervalued and should strengthen further,” while also stressing that “excessive volatility in the currency isn’t healthy.” In their view, “reported intervention and a firmer BoJ message could change that quickly.” BNY Mellon argues that stronger intervention would demonstrate that the authorities are prepared to resist further depreciation, while clearer policy guidance would “reduce the credibility discount embedded in JPY assets.”

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Euro holds near mid-1.1500s, highest level since June 17 as receding Fed hike bets hit USD

  • EUR/USD gains positive traction for the fifth straight day amid sustained USD selling bias.
  • A slump in oil prices ease inflation fears and tempers Fed hike bets, undermining the USD.
  • Aggressive JPY short-covering further weighs on the buck amid hopes for a US-Iran deal.

The EUR/USD pair builds on last week’s breakout momentum above the 1.1460-1.1470 horizontal barrier and attracts buyers for the fifth straight day on Monday. Spot prices climb to a fresh high since June 17, beyond mid-1.1500s during the Asian session and seem poised to appreciate further amid a broadly weaker US Dollar (USD).

In fact, the USD Index (DXY), with tracks the Greenback against a basket of currencies, prolongs last week’s retracement slide from the vicinity of the year-to-date as a slump in crude oil prices force traders to temper bets on extreme Fed tightening. US President Donald Trump said that he will order American forces to hold off on new strikes against Iran, claiming Mideast allies have reached the parameters of a deal to end the 5-month-old war. This, along with the OPEC+ decision on Sunday to increase production in September, is seen weighing heavily on crude oil prices.

Brown Brothers Harriman’s Elias Haddad argues that the recent strength in the Dollar is losing momentum, with the bank now judging that “the USD rally from May has run its course, with DXY poised to retreat back into a 96.00-100.00 range.” BBH contends that the earlier “tailwind to USD from resilient US economic activity” is increasingly being offset by policy concerns, specifically that “Fed Chair Kevin Warsh failure to turn tough inflation rhetoric into a credible policy” is “increasing the risk the Fed falls behind the curve in containing inflation.”

Apart from this, aggressive follow-through short-covering in the Japanese Yen (JPY) turns out to be another factor undermining the USD. The Euro, on the other hand, continues to draw support from resilient Eurozone inflation data, which backs the case for the European Central Bank (ECB) to raise interest rates again in September. This, in turn, validates the near-term positive outlook for the EUR/USD pair as traders now look forward to important US macro releases scheduled at the beginning of a new month, starting with the ISM Manufacturing PMI later this Monday, for fresh impetus.

Societe Generale’s Sam Cartwright argues that the latest inflation figures, taken together with the “solid 2Q26 GDP print,” strengthen the policy case for further tightening. In his view, “today’s release should support another ECB rate hike in September,” as resilient growth and slightly firmer price pressures give the central bank room to maintain a hawkish stance.

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Rupee Near Four-Week High

The Indian rupee climbed to around 95.1 per dollar, extending last week’s gains to a near four-week high as lower oil prices reinforced optimism from the Reserve Bank of India’s sustained market intervention. Brent crude prices fell 4.7% to below $84 a barrel after US President Donald Trump said plans for an attack on Iran had been shelved to allow negotiations on a nuclear deal, easing concerns over India’s import bill and inflation outlook. The rupee rallied 1.2% last week, its strongest weekly gain since March, as the RBI’s near-daily dollar sales eased fears of a slide beyond 97 per dollar. Additional support came after RBI data showed measures to attract capital inflows had brought in about $41 billion, including $36.7 billion through foreign currency non-resident deposits, bolstering the central bank’s capacity to defend the rupee. Meanwhile, the RBI’s net foreign exchange forward book narrowed slightly to $103.3 billion in June, reflecting lower near-term dollar liabilities.

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United States Dollar Index weakens below 100.00 as Trump says new Iran talks would begin Monday

  • US Dollar Index softens to around 99.70 in Monday’s Asian session. 
  • Trump said new Iran talks would begin Monday after he called off a planned attack on Iran.
  • US NFP data will be in the spotlight on Friday. 

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 99.70 in the Asian trading hours on Monday. The DXY declines amid improved risk sentiment. Traders brace for the release of the US ISM Manufacturing Purchasing Managers Index (PMI) report, which will be released later on Monday.

US President Donald Trump said on Sunday that he had called off an attack on Iran and that talks between the two sides would happen on Monday. Trump suggested an agreement on reopening the Strait of Hormuz may be close and added that he would also continue to pursue a path to end Iran’s nuclear program.

Hopes of a breakthrough between Washington and Tehran could undermine a safe-haven currency such as the US Dollar against its rivals in the near term.  

All eyes will be on the US employment data on Friday. This report could offer some hints on the health of the labor market. Economists expect Nonfarm Payrolls (NFP) to increase by 91,000 in July, while the Unemployment Rate is projected to rise to 4.3% during the same period. In case of stronger-than-expected outcomes, this could help limit the DXY’s losses. 

The Federal Reserve (Fed) held the interest rates unchanged at its July policy meeting last week. Markets have priced in nearly a 64.7% chance of a US rate hike in September, down from about 77% before the July Fed meeting, according to the CME FedWatch tool.

Dollar seen under renewed pressure as Fed rate expectations fade

According to analysts at Commerzbank, the Dollar is likely to come back under pressure once tensions with Iran subside, as they judge that the Fed is “unlikely to raise rates as markets have priced in.” In their view, the easing of geopolitical risk would remove a key support for the currency, leaving it more vulnerable to disappointment on the US rate path.

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Australian Dollar remains stronger following China’s RatingDog Manufacturing PMI data

  • The Australian Dollar remains strong despite China’s manufacturing PMI easing to 50.9 in July.
  • The US Dollar faces pressure following Japan’s $58.97 billion yen-buying intervention and easing risk aversion.
  • US-Iran diplomatic claims remain contested, keeping market sentiment cautious as Iranian forces stay on high alert.

AUD/USD depreciates after opening at a bullish gap, remaining in the positive territory and trading around 0.7030 during the Asian hours on Monday. The currency pair maintains its gains as the Australian Dollar (AUD) remained resilient, supported by economic developments in China, Australia’s major trading partner.

China’s RatingDog Manufacturing Purchasing Managers’ Index (PMI) eased to 50.9 in July from 51.7 in June, missing market expectations of 51.5; it continued to signal expansion in manufacturing activity.

Aussie inflation surprise seen as fuel-driven but still above RBA target

BNY’s Geoff Yu notes that RBA Assistant Governor Sarah Hunter characterised Australia’s latest CPI print as “a touch softer” than anticipated, with the downside surprise in headline inflation “mainly driven by lower fuel prices.” Hunter’s comments underscore that the moderation in price pressures is narrowly focused, rather than signalling a broader disinflation trend, and come against the backdrop of inflation still running above the RBA’s 2–3% target band.

The US Dollar (USD) struggles against major peers following official confirmation from Japan regarding joint currency interventions. Japanese authorities confirmed they carried out coordinated yen-buying operations with the United States, with Bank of Japan data pointing to spending of up to $58.97 billion on Thursday. Tokyo further signaled its readiness to intervene again if necessary, noting that close communication with US counterparts remains ongoing.

Pressure on the Greenback was further compounded by a broader easing of market risk aversion, spurred by potential diplomatic developments between the US and Iran. Sentiments shifted after reports indicated US President Donald Trump paused planned military strikes. In a post on Truth Social, President Trump stated that Iran and neighboring Middle Eastern nations had requested time to finalize a deal, a proposal that would lead to the complete reopening of the Strait of Hormuz and address Iran’s nuclear program.

However, financial markets remain cautious as Iranian officials swiftly contested these claims. Reporting via Iran’s Mehr news agency, officials characterized the assertion that Tehran sought a pause as “nothing but a new lie.” They emphasized that Iranian military forces remain on high alert and fully prepared for any eventuality, keeping geopolitical uncertainty elevated.

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Japan’s Katayama says no comment on whether there was FX intervention on Monday

Japan’s Finance Minister Satsuki Katayama said on Monday that she has no comment on whether there was foreign exchange (FX) intervention today, Reuters reported. 

Earlier Monday, Katayama stated that Japanese authorities conducted coordinated Yen-buying intervention with the United States (US) on Friday, adding that officials will not hesitate to carry out more FX intervention with Washington. 

Meanwhile, US Treasury Secretary Scott Bessent stated that Friday’s coordinated FX moves curbed disorderly Japanese Yen (JPY) swings. Bessent said that the Treasury will stay vigilant and maintain close communication with counterparts at the Ministry of Finance (MoF) and the Bank of Japan (BoJ). 

Key quotes from Japan’s Katayama

Conducted coordinated yen-buying intervention with U.S. on Friday. 

Won’t hesitate to carry out more forex intervention with U.S.

Intervention aimed at tackling recent excessive, disorderly yen moves. 

Japan plans to use Federal Reserve’s foreign and international repo facility in future. 

Japan remains vigilant and in close contact with U.S. Treasury counterparts. 

No comment on forex intervention except Friday. 

Market reaction

The Japanese Yen (JPY) attracts some buyers following the headlines. At the time of writing, the USD/JPY is down 0.62% on the day at 156.35.