Daily Market Report
08/19/2026
EUR/USD ranged in the high 1.15s to low 1.16s overnight. EUR/USD rises after registering minor losses in the previous day, trading around 1.1600 during the European hours on Wednesday. The pair holds ground as the Euro (EUR) remains stronger following the release of Eurozone Harmonized Index of Consumer Prices (HICP) data for July. Eurozone annual inflation rose to 2.9% in July from 2.8% in June, matching preliminary estimates and staying above the European Central Bank’s 2.0% target. Core inflation, excluding food and energy, also ticked up to 2.5% from 2.4%.
Strategists at BNY Mellon caution that the adjustment underway in the Dollar could unfold faster than many expect, noting that “that timeline could prove conservative.” They point out that “the Dollar is already weakening in nominal terms, introducing some pass-through inflation risk, even if the US is less exposed to this channel than more export-dependent economies.” This prospective external impulse, BNY adds, “comes on top of uniquely strong domestic inflation pressures from capital expenditure and demand,” reinforcing their view that the current Dollar move is occurring against a backdrop of already elevated underlying price dynamics.
The British Pound (GBP) is up 0.2% to near 1.3557 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair trades higher as the US Dollar faces selling pressure, with traders scaling back Federal Reserve (Fed) interest rate hike bets due to weak United States (US) economic data for August.
Analysts at ING highlight that “for today, the focus will be on tonight’s release of the FOMC minutes for the July meeting,” noting that the earlier decision saw “the vote… 9-3 for unchanged rates and the event proved a dovish one for the short end of the US curve and the Dollar, while the long end sold off.” ING argues that “the suspicion is that the 12-member FOMC is less hawkish than the participants whose projections delivered forecasts of a 9:9 split for a hike in the June set of Dot Plots.” As a result, while they concede “there may be a few hawkish references in tonight’s minutes that could nudge the Dollar and short-dated rates a little firmer,” they stress that “we do not see the minutes as a game changer.”
Ahead of the FOMC minutes, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.26% lower to near 99.38, close to its two-month low of 99.29 posted on Monday.
The Japanese Yen (JPY) recovers strongly against its major currency peers on Wednesday after underperforming in the past few days. The US Dollar (USD) is down 0.25% against the Japanese currency at around 159.20 during the early European trading session.
Financial markets, remaining confident that the Bank of Japan (BoJ) will raise interest rates at its September meeting, have staged a strong comeback for the Asia-Pacific currency. Firm BoJ interest rate hike expectations remain intact even as Japan’s Q2 flash Gross Domestic Product (GDP) data has come in weaker than projected.
Source: FX Street