GBP/USD
Sterling consolidates after sharp losses, having updated early August lows. Long-term bond yields in the U.K. and globally have risen, raising systemic concerns. The BoE has not yet cut rates, waiting for inflation progress, but may follow the Fed’s lead after September 17. Political risks also weigh, with PM Keir Starmer’s government under pressure to deliver on tax reforms. U.K. services PMI (10:30 GMT+2) is expected at 53.6, composite at 53.0. Retail sales data is due Friday.
AUD/USD
The Australian dollar trades mixed after a sharp decline earlier this week, later supported by U.S. PMI releases and strong local data. Q2 GDP rose 0.6% q/q (vs. 0.5% expected), 1.8% y/y. Services PMI improved to 55.8 in August. However, the AiG manufacturing index plunged to –13.9. Dollar weakness from Fed cut expectations may keep AUD supported in the short term.
USD/JPY
The pair pushes higher, testing 148.60 on strong bullish momentum. Traders await the Fed’s Beige Book (20:00 GMT+2) and U.S. labor data Friday. In Japan, July household spending (01:30 GMT+2) is forecast +2.3%, with leading/coincident indicators at 07:00 GMT+2. Political instability weighs on the yen after the resignation of senior LDP figure Hiroshi Moriyama, raising concerns over BoJ’s ability to proceed with policy tightening.
XAU/USD
Gold extends its rally to fresh record highs near $3530, fueled by Fed rate cut bets (92% probability for September). Other central banks, including the BoE, may also shift toward easing, boosting gold’s appeal. However, stronger U.S. data could delay cuts, prompting pauses in the easing cycle. For now, bullion remains in strong demand as the dollar softens.