ECB Monetary Policy Decision Statement out today.

The foreign exchange (FX) markets witnessed significant movements yesterday as markets reacted to key data releases and anticipated central bank decisions. Here’s a recap of the events that shaped the market for the currencies GBP, EUR, and USD:

GBP (British Pound): The British Pound (GBP) showed resilience on 26th July, despite mixed economic data releases. Markets closely monitored the UK’s economic indicators, including the CBI Distributive Trades Survey, which measures retail sales activity. The survey indicated a decline in retail sales in July, which raised concerns about consumer spending and economic growth. However, the GBP managed to hold steady as the focus shifted to the Bank of England (BoE) monetary policy decision, scheduled for later next week. Expectations for potential policy adjustments influenced the GBP’s movements.

EUR (Euro): The Euro (EUR) struggled on 26th July due to disappointing economic data releases and uncertainty surrounding the European Central Bank’s (ECB) monetary policy decision. Markets reacted to Germany’s Ifo Business Climate Index, which fell below expectations, signaling weakened business sentiment in the Eurozone’s largest economy. Additionally, eyes were focused on the ECB’s monetary policy decision, scheduled for later today. Anticipation of a potential 25bps raise in rates added to the EUR’s volatility.

USD (United States Dollar): The United States Dollar (USD) displayed strength on 26th July, supported by positive economic data and anticipation of the release of US Durable Goods Orders. Market participants received confirmation that the Federal Reserve raised interest rates by 25bps, which contributed to the USD’s performance. Markets were eagerly awaiting the release of US Durable Goods Orders data, which could indicate the strength of consumer spending and business investment in the US economy.

Key Data Releases:

• Germany’s Ifo Business Climate Index (EUR): The release of the Ifo Business Climate Index for Germany showed weakened business sentiment in the Eurozone’s largest economy, contributing to the EUR’s struggles.
• Federal Reserve raise interest rates (USD) : The federal reserve raised interest rates by 25bps as was expected earlier in the week.
• European Central Bank’s Monetary Policy Decision (EUR)  The European Central Bank’s monetary policy decision was scheduled for later today. Markets closely monitored the central bank’s statements and policy adjustments, which could significantly impact the EUR’s movements.

Economic Calendar