The dollar sold off last week as frustration with Fed Chair Warsh’s lack of guidance, and joint US–Japan intervention, drove volatility higher. Both the BoE and Fed held and the euro found extra support from a Q2 growth beat and firmer inflation, lifting September ECB hike odds to around 65%. With Warsh content to let rising yields do the work, volatility looks set to persist. Friday’s US Non-Farm Payrolls is the week’s key release after last month’s miss.
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Today’s FX rates: 03 August 2026
| Currency pair | Rate |
|---|---|
| gbp usd | 1.3455 |
| eur usd | 1.1520 |
| gbp eur | 1.1678 |
Rates correct as of 11:24am on Monday 03 August but may now have changed.
The Big 3
A deeper look at the performance of major currency pairs this week.
Warsh’s silence spurs a dollar sell-off
GBP/USD rallied to test 1.3480 as both the BoE and Fed held. The dollar then sold off sharply, with markets frustrated by Fed Chair Warsh’s lack of guidance and Japanese intervention adding pressure. The BoE hold carried a slightly hawkish skew, three of nine voted to hike, but a fragile growth outlook keeps further rises in check, leaving some downside risk to sterling as fiscal policy stays uncertain. With Warsh happy to let rising yields do the work, volatility looks set to stay elevated. Friday’s Non-Farm Payrolls is the week’s key release.
Growth and inflation beats lift the euro’s rate-hike odds
EUR/USD ground higher last week, driven mainly by post-FOMC dollar weakness after Warsh’s no-guidance stance unsettled markets, with joint US–Japan intervention adding to the pressure. The euro had its own support too: Q2 growth beat at 0.4% and July inflation came in at 2.9%, lifting the odds of a September ECB hike to around 65%. With the ECB among the more proactive central banks, focus turns to how far tightening could run. Friday’s US Non-Farm Payrolls is the week’s key release after last month’s miss.
Sterling holds its ground as both banks pause
GBP/EUR has continued to unwind from its highs of three weeks ago, though the broader uptrend holds while price stays above 1.1610. The BoE’s expected hold had little impact, with the slightly hawkish three-way vote split offset by a fragile growth outlook, and sterling now looks to Burnham’s fiscal plans as the bigger driver. On the euro side, a Q2 growth beat and firmer July inflation have lifted September hike odds to around 65%. With no central bank decisions imminent, expect range-bound, low-volatility trade.
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Looking forward
Key dates for your calendar.
- Monday: 🇨🇳 China RatingDog Manufacturing PMI, 🇺🇸 US ISM Manufacturing PMI
- Tuesday: 🇺🇸 US JOLTs Job Openings
- Wednesday: 🇺🇸 US ISM Services PMI
- Thursday: 🇦🇺 Australia Balance of Trade
- Friday: 🇨🇳 China Balance of Trade, 🇪🇺 Eurozone Balance of Trade, 🇺🇸 US Non-Farm Payrolls, 🇺🇸 US Unemployment Rate, 🇨🇦 Canada Unemployment Rate, 🇨🇦 Canada Ivey PMI
What we’re talking to our clients about
Clients can always reach out to us on the phone. Here are some of the conversations we’re having:
- US Manufacturing PMI dollar impact
- US and Iran looking for conflict resolution
- BoE monetary policy short and long-term
The contents of this article do not constitute financial advice and are provided for general information purposes only. While the content is based on information believed to be accurate at the time of publication, no guarantee is provided.
