GBP Awaits BoE Decision as Dollar Slips and Yen Gains Momentum

Thursday finally brings some real weight to the macro calendar after a few relatively quiet days. The highlight of the day is the interest rate decision from the Bank of England, where a 25 basis point rate cut is expected. If delivered, this will lower the UK rate from 4.25% to 4.00%, potentially shaping the direction for GBP pairs moving forward.

Across the Atlantic, we’re also watching for unemployment claims data from the US, and Ivey PMI from Canada, forecasted at 55.2. These events could stir up short-term volatility, particularly for the CAD and USD.

Overnight, one geopolitical headline caught traders off guard: the US announced a new 15% tariff on Japanese imports. The reaction was swift—the Japanese Yen surged, becoming one of the strongest currencies at the European open. This fresh round of tariff talk rekindles some of the old global trade tension themes and adds a layer of risk aversion to the mix.

Elsewhere on the FX board, we’re seeing broad USD weakness, joined by softness in the British Pound and Canadian Dollar. On the flip side, European currencies and antipodeans (AUD and NZD) are showing strength as we move into the core of the European trading session.

American indices continue to power higher, staging a strong comeback after last week’s steep decline. So far, the rally looks convincing, especially in the tech-heavy Nasdaq, which continues to claw back lost ground.

In Europe, the DAX is under the microscope as it battles a critical resistance level at 23,900 points. This level was previously a key support before the sharp drop, and the ongoing struggle around this area could determine whether bulls regain control or sellers step back in.

The metals market remains strong this week. Gold and silver continue to grind higher, supported by a softer dollar and renewed interest in safe havens. The move has been steady and well-structured, helping restore confidence after recent volatility.

Oil, however, remains a different story. After an attempted breakdown on Tuesday, Wednesday brought a sharp intraday rebound, only to reverse again later in the session. WTI is still negative on the week, weighed down by supply-side concerns and the latest OPEC+ output increase.

Wednesday’s earnings reports brought mixed sentiment. McDonald’s impressed, jumping 3% on solid numbers. Walt Disney, however, missed revenue expectations and dropped 2.6%. Uber, despite better-than-expected results, failed to gain traction and remained flat.

Today, eyes are on Eli Lilly, which will post results before the US market opens. This could bring some action to the pharma sector depending on how numbers come in and what the outlook reveals.

Source: https://www.axiory.com/analytics/market-news/gbp-awaits-boe-decision-as-dollar-slips-and-yen-ga