Daily Market Report
07/31/2026
EUR/USD ranged in the low 1.15s overnight. EUR/USD corrects lower on Friday and trades near 1.1500 following a two-day rally that saw the pair gain more than 1%. While the risk-averse market atmosphere supports the US Dollar and weighs on the pair, the stronger-than-expected core HICP inflation reading from the Eurozone helps the Euro limit its losses.
The shared currency surged after the Federal Reserve (Fed) kept rates steady by a 9 to 3 vote. Three dissenters supported a 25-basis-point rate hike. The EUR/USD trades in a volatile fashion above 1.1420, up 0.3%.
The Fed observed that economic activity continues to grow solidly despite high uncertainty caused by the Middle East conflict. The statement highlighted that “Productivity growth and capital investment are strong. Job gains remain steady with the workforce, and the unemployment rate has seen little change.” Additionally, the policy statement emphasised the Fed’s commitment to maintaining price stability.
GBP/USD trades in negative territory below 1.3450 in the European trading hours on Friday. Heightened Middle East tensions and rising global oil prices provide some support for the safe-haven US Dollar (USD), weighing on the pair. The US Michigan Consumer Sentiment Index will be published later on Friday.
The briefing at 18:30 GMT carries the whole forward question, because this meeting attaches no Summary of Economic Projections, and the statement retains the short form that struck forward guidance in June. Three dissents are the hawkish bloc putting itself on the record for the first time under this Chair, and a Chair who reads them as direction of travel takes this move straight back. September already carries roughly three-quarters odds of at least one increase.
Following Thursday’s unprecedented decline fuelled by a suspected intervention, USD/JPY staged a rebound and rose toward 161.00 earlier Friday but came under renewed bearish pressure in the European session. As markets assess the BoJ’s policy outlook following the bank’s decision to maintain the status quo, the pair seems to have stabilized at around 160.00.
Source: FX Street