Weekly Market News, 3 August 2026: The Fed and the Bank of England Both Hold, and the Dollar Falls Anyway
- Paratus Wealth
- 1 day ago
- 10 min read
Updated: 4 hours ago
Currency moves rarely make the morning headlines, yet for globally mobile families they quietly shape pension income, property plans, school fees and everything that crosses a border. Each week we share the Market News from our partners at Agility Forex, the currency specialists we partner with for our currency exchange service, so you can see the macro picture that matters when your financial life spans more than one country.
Last week we described a market braced for interest rates to stay higher for longer. This week it found out. The Federal Reserve met on Wednesday and left rates unchanged. The Bank of England met on Thursday and did the same. Neither central bank moved, and six policymakers between them voted for an immediate rise. And yet the US Dollar finished the week as the weakest of the three major currencies. Here is why, and here is the week of 3 August 2026.
Key figures this week
Every figure below is as published by Agility Forex in the commentary reproduced further down this page. Opening levels are stated in the source as approximate.
GBP/USD (Cable): 1.3479. Up 1.17% on the week, from an opening level of approximately 1.3320.
EUR/USD: 1.1543. Up approximately 1.37% on the week, from around 1.1350.
GBP/EUR: 1.1690. Down 0.19% on the week, from close to 1.1715, with a weekly low of 1.1648 on Thursday.
Federal Reserve target rate: 3.50% to 3.75%. Maintained. Three policymakers dissented in favour of an immediate rate increase. The committee total was not published in the source.
Bank of England Bank Rate: 3.75%. Unchanged. The Monetary Policy Committee voted 6-3 to maintain rates, with three members supporting an immediate increase.
US Core PCE inflation, month on month: 0.1%. Slowed from 0.3%, when 0.2% was expected.
US Advance Q2 GDP: exceeded expectations. No figure was published in the source.
US Initial Jobless Claims: increased. Indicating a modest cooling in labour market conditions. No figure was published in the source.
Eurozone Q2 GDP, preliminary: broadly exceeded expectations. No figure was published in the source.
Eurozone unemployment: close to historically low levels. No figure was published in the source.
Eurozone Flash CPI: headline moderating, core resilient. No figure was published in the source.
Next major release: US Non-Farm Payrolls, Friday 7 August 2026. Preceded by JOLTS Job Openings on Tuesday, ADP Employment Change on Wednesday and Initial Jobless Claims on Thursday.
This week at a glance
Two central banks held, and the Dollar fell anyway. Markets had increasingly priced in a more hawkish Federal Reserve. When the Chairman declined to reinforce expectations of near-term tightening, investors unwound long US Dollar positions and the Greenback gave back much of its recent strength.
Six policymakers voted for an immediate rate rise. Three dissented at the Federal Reserve and three at the Bank of England. Neither committee moved, but the split votes show how finely balanced both decisions were.
The data helped the doves. Core PCE inflation, the Federal Reserve's preferred measure, slowed to 0.1% when 0.2% was expected. Weekly jobless claims also increased, pointing to a modest cooling in the US labour market.
Sterling had a split week. GBP/USD recorded its strongest weekly performance in several months, while GBP/EUR finished slightly lower as the Euro strengthened on its own resilient growth data.
The Euro was among the strongest majors. Preliminary Eurozone Q2 GDP beat expectations, unemployment stayed near historic lows, and sticky core inflation reduced expectations of aggressive European Central Bank easing.
Next week belongs to the US labour market. PMI surveys run Monday to Wednesday, then ADP, JOLTS and jobless claims lead into Friday's Non-Farm Payrolls report.
Market overview
The commentary that follows is this week’s Market News from Agility Forex, written by Ben Davies (Head of Dealing), reproduced in full and word for word. Agility runs this week’s briefing as one continuous narrative rather than separate currency sections; the sub-headings below are added by Paratus purely for readability, and the text within them is Agility’s own.
Currency markets experienced a decisive shift in sentiment over the course of the week, with the USD Dollar emerging as the weakest of the three major currencies. Whilst trading was initially subdued ahead of several key central bank announcements, volatility accelerated sharply following Wednesday evening's Federal Reserve interest rate decision and Chairman Kevin Warsh's subsequent press conference. The Federal Reserve left interest rates unchanged, as widely expected, although markets interpreted the accompanying commentary as less hawkish than previously anticipated.
This prompted investors to unwind long USD Dollar positions, reversing much of the Greenback's recent strength. Against this backdrop, GBP/USD (Cable) appreciated from an opening level of approximately 1.3320 to close at 1.3479, representing a weekly gain of 1.17%. EUR/USD followed a similar trajectory, rallying from around 1.1350 to finish the week at 1.1543, an appreciation of approximately 1.37%. Meanwhile, GBP/EUR traded within a comparatively narrow range, opening close to 1.1715 before falling to a weekly low of 1.1648 on Thursday and recovering modestly to close at 1.1690, down 0.19% over the week.
Above: the Currency Market Weekly Report circulated by Agility Forex UK with this week’s Market News.
The Federal Reserve decision
The USD Dollar remained under pressure for much of the second half of the week as investors reassessed the outlook for US monetary policy. Prior to Wednesday's Federal Reserve meeting, markets had increasingly priced in the possibility that persistent inflationary pressures and resilient economic data could encourage the Federal Reserve to adopt a more hawkish stance later this year. Although the Federal Open Market Committee maintained interest rates at 3.50%-3.75%, three policymakers dissented in favour of an immediate rate increase, highlighting that inflation risks remain a concern.
Nevertheless, Chairman Kevin Warsh refrained from reinforcing expectations of near-term tightening, instead emphasising that future policy decisions would remain data dependent. Markets interpreted the absence of stronger forward guidance as a signal that the bar for further interest rate increases may be higher than previously assumed, triggering a broad-based sell-off in the USD Dollar.
US economic data
Economic data released throughout the week reinforced the softer tone towards the USD Dollar. Whilst Advance Q2 GDP growth exceeded expectations and suggested the US economy remains resilient, Core PCE inflation – the Federal Reserve's preferred measure of inflation – slowed more than forecast (from 0.3% to 0.1% when 0.2% was expected), easing concerns over underlying price pressures. Weekly Initial Jobless Claims also increased, indicating a modest cooling in labour market conditions. Collectively, these releases encouraged investors to reduce expectations of additional policy tightening, weighing on US Treasury yields and further undermining demand for the USD Dollar against both Sterling and the Euro.
Above: a Federal Reserve press conference. Image supplied by Agility Forex UK with this week’s Market News. Paratus Wealth has not verified the identity of the individual pictured and does not identify them.
The Bank of England decision
Attention then shifted to the United Kingdom on Thursday as the Bank of England announced its latest monetary policy decision. As expected, policymakers voted to leave Bank Rate unchanged at 3.75%. The Monetary Policy Committee voted 6-3 in favour of maintaining rates, with three members continuing to support an immediate increase. Alongside the decision, the Bank published an updated Monetary Policy Report outlining three economic scenarios, with the central projection anticipating inflation peaking later this year before gradually returning towards target over the medium term. Governor Andrew Bailey reiterated that policy would remain restrictive for as long as necessary to ensure inflation returns sustainably to target, whilst acknowledging signs that domestic inflationary pressures are beginning to ease.
Sterling
Sterling initially strengthened following the announcement as investors focused on the relatively hawkish voting split and the Bank's continued commitment to maintaining restrictive monetary policy. However, those gains proved relatively short-lived against the Euro as improving sentiment towards the single currency offset Sterling's support. Against the USD Dollar, however, Sterling benefited considerably from the broader weakness in the Greenback, allowing GBP/USD to record its strongest weekly performance in several months despite relatively limited domestic surprises outside of the Bank of England meeting.
The Eurozone
Within the Eurozone, economic releases painted a relatively resilient picture of activity despite ongoing concerns surrounding regional growth. Preliminary second-quarter GDP estimates broadly exceeded expectations, whilst unemployment remained close to historically low levels, helping to underpin confidence in the Euro throughout the week. These stronger-than-anticipated growth indicators, combined with broad USD Dollar weakness, enabled EUR/USD to extend gains following Wednesday's Federal Reserve meeting and maintain those advances into Friday's close.
Friday's attention centred on the Eurozone's Flash inflation estimates. Whilst Headline CPI continued to moderate, Core CPI remained comparatively resilient, reinforcing expectations that underlying inflationary pressures remain sticky across the bloc. Although the release generated only modest volatility, it provided further support for the Euro by reducing expectations of aggressive European Central Bank policy easing in the near term. Combined with continued USD Dollar weakness, the Euro finished the week as one of the strongest performing major currencies.
The week ahead
Looking ahead, next week's calendar is heavily focused on both European and US economic data. Manufacturing and Services PMI releases across Europe and the United States between Monday and Wednesday will provide an updated assessment of business activity and economic momentum. However, attention will increasingly turn towards the US labour market, with ADP Employment Change, JOLTS Job Openings and Weekly Jobless Claims all preceding Friday's Non-Farm Payrolls report. The previous Non-Farm Payrolls release demonstrated continued resilience in US employment, although markets will be watching closely for any signs that hiring momentum is beginning to soften following the recent moderation in inflation.
A weaker-than-expected employment report would likely reinforce expectations that the Federal Reserve can afford to remain patient, potentially extending recent USD Dollar weakness. Conversely, another robust labour market reading could revive expectations of further policy tightening and allow the USD Dollar to recover some of the losses experienced this week.
Written by Ben Davies (Head of Dealing) | bdavies@agilityforex.co.uk | +44 (0) 20 4525 3399
Key economic data this week
The Key Data to look out for this week is as follows, reproduced from Agility Forex UK.
Monday 3rd August
EU Retail Sales (MoM) & (YoY)
EU HCOB Manufacturing PMI
US ISM Manufacturing Employment Index
US ISM Manufacturing New Orders Index
US ISM Manufacturing PMI
US ISM Manufacturing Prices Paid
US Loan Officer Survey
Tuesday 4th August
US Factory Orders (MoM)
US JOLTS Job Openings
Wednesday 5th August
EU HCOB Composite PMI
EU HCOB Services PMI
EU HCOB Composite PMI
EU Producer Price Index (MoM) & (YoY)
US ADP Employment Change
US S&P Global Composite PMI
US ISM Services Employment Index
US ISM Services New Orders Index
US ISM Services PMI
US ISM Services Prices Paid
US Fed's Cook speech
Thursday 6th August
EU Factory Orders n.s.a. (MoM) & (YoY)
EU Economic Bulletin
EU Retail Sales (MoM) & (YoY)
US Challenger Job Cuts
US Initial Jobless Claims
US Nonfarm Productivity
US Unit Labor Costs
US Fed's Musalem speech
Friday 7th August
EU Industrial Production n.s.a. w.d.a. (YoY)
EU Industrial Production s.a. (MoM)
EU Trade Balance s.a.
US Average Hourly Earnings (MoM) & (YoY)
US Labor Force Participation Rate
US Nonfarm Payrolls
US U6 Underemployment Rate
US Unemployment Rate
US Fed's Bowman speech
If you have any questions regarding the Market News and associated data, please contact the Dealing Team.
What a 1.17% week looks like in money
Paratus framing, not Agility. Illustrative arithmetic, not financial advice.
A percentage point is easy to skim past. On the size of transfer that a property purchase, a pension consolidation or a school fee year involves, it is not. Using only the levels Agility published above, and setting aside any fees, spread or timing:
Converting 100,000 Sterling into US Dollars at Friday's close of 1.3479 rather than Monday's opening level of approximately 1.3320 is a difference of about 1,590 US Dollars.
Converting 100,000 Euros into US Dollars at 1.1543 rather than around 1.1350 is a difference of about 1,930 US Dollars.
Converting 100,000 Sterling into Euros at 1.1690 rather than close to 1.1715 is about 250 Euros less. Measured from Monday's opening level to Thursday's low of 1.1648, the difference was nearer 670 Euros.
These are simple multiplications on published levels, not a recommendation about when to transact, and nobody can reliably pick the top or bottom of a week. The point is scale: on a six figure transfer, an ordinary week is worth a conversation.
What this means for globally mobile families
Paratus framing, not Agility. General information, not financial advice.
For globally mobile families, currency is rarely just a number on a screen. The level of GBP/EUR or GBP/USD shapes the real value of a pension paid in one currency and spent in another, the cost of a home abroad, school fees, and how far retirement income stretches.
This week carried a lesson worth keeping. Currencies move on the gap between what markets expect and what they actually get, not on the decision itself. Interest rates did not change anywhere, and the US Dollar still had its worst week in months. Anyone waiting for a big event before thinking about currency risk may find the big event was a week in which nothing officially happened.
Here is how Paratus Wealth can help. The themes in this week’s briefing connect directly to the planning questions we hear, and to the services we provide:
Moving money across borders. When two central banks can hold rates and a currency can still move more than 1% in a week, the timing and structure of a transfer matters. Our currency exchange service with Agility Forex is built for exactly these transfers, and it is often the simplest place to start a wider conversation.
Pensions held in one currency, life lived in another. Currency and interest rate moves sit underneath almost every cross-border retirement plan. Our retirement planning service, with options such as a SIPP, a QROPS and a pension review, looks at how that risk fits your wider picture.
Investing through shifting rate expectations. A market that swung from pricing a rate rise to unwinding that bet within a single meeting is exactly why portfolio structure matters more than market timing. Our savings and investment approach is built around long horizons rather than single weeks.
Protecting the plan and the people in it. Income, health and life protection, including life insurance, helps keep a plan intact when markets and circumstances move.
The wider cross-border picture. Cashflow modelling shows how rate and currency moves could play out over time, and UK inheritance tax planning addresses the estate questions that often sit alongside them for globally mobile families.
Paratus Wealth helps expatriates plan around exactly this kind of cross-border complexity, from currency and cost-of-living planning to pensions, investments, protection and estate planning, so that short-term market moves are met with a long-term plan rather than a reaction. None of the above is financial advice. It is general information to help you frame the right questions. If any of it is part of your situation, you are welcome to speak with Paratus.
Related reading
Market News written by Ben Davies (Head of Dealing), Agility Forex. Shared by Paratus Wealth with permission. The commentary above is general market information provided by Agility Forex and is reproduced verbatim. It is for information only, does not constitute financial, investment or currency advice, and should not be relied upon as such. Paratus Wealth does not provide services to, and does not market to, residents of the United Kingdom. Any UK references in this commentary relate to cross-border exposure for people living outside the UK. Currency and investment values can fall as well as rise. This page is also subject to the full Paratus Wealth regulatory disclaimer shown in the site footer. For guidance specific to your circumstances, contact our team.