Daily Analysis 28/07/2026

• GBP/USD Price: The GBP/USD pair continues to trade defensively near the 1.3300 level during Tuesday's European session.
• BoE rates: Market attention is focused on this week's Bank of England (BoE) meeting, where policymakers are widely expected to leave the Bank Rate unchanged at 3.75%.
• Fiscal concerns: The Pound has weakened as markets remain cautious over Prime Minister Andy Burnham's spending plans. His proposals to cap transport fares and electricity bills have raised concerns about increased government spending and fiscal sustainability, drawing comparisons to the market turmoil experienced during the 2022 Liz Truss administration.
• Fed rate: Citadel Securities expects the Federal Reserve to deliver another interest rate hike to reinforce Chairman Kevin Warsh's commitment to fighting inflation.
• US tariffs: The latest US tariff package, introducing duties of 10% to 12.5% on imports from dozens of countries, includes the United Kingdom.

Closing statement: GBP/USD remains under pressure as fiscal uncertainty in the UK and expectations of a hawkish Federal Reserve continue to favor the US Dollar. This week's Bank of England meeting will be the key event for Sterling, with investors looking for guidance on the future path of UK interest rates.

• XAU/USD Price: Gold (XAU/USD) remains under selling pressure, extending its decline from above $4,100 and testing the $4,050 level during Tuesday's European session.
• Trade policy: US Trade Representative Jamieson Greer stated that tariffs have no impact on interest rates and warned that additional tariffs could be introduced following the ongoing investigation into global industrial "excess capacity."
• Rate expectations: Markets widely expect the Federal Reserve to keep interest rates unchanged within the 3.50%–3.75% range at this week's meeting. According to the CME FedWatch Tool, there is roughly a 62% probability that policymakers will maintain current rates.
• Fed tightening: Despite expectations for no immediate policy change, traders continue to price in additional tightening later this year. Current market pricing implies around a 38% chance of a 25-basis-point rate hike at the July meeting and an 81% probability of a hike by September, supporting the US Dollar and limiting gold's upside.
• Warsh's guidance: Investors will closely monitor the Fed's policy statement and Chairman Kevin Warsh's press conference for updated guidance on inflation and the economic outlook.

Closing statement: Gold remains on the defensive as investors await the Federal Reserve's policy decision. While the Fed is expected to leave rates unchanged this week, expectations for additional tightening and a potentially hawkish message from Chairman Warsh continue to support the US Dollar and cap gold's recovery.

• Crude Oil Price: West Texas Intermediate (WTI) continues to trade lower, hovering around $81.50 per barrel during Tuesday's European session.
• US-Iran: US President Donald Trump said that "very friendly negotiations" are underway with Iran and expressed optimism that an agreement could be reached.
• Hormuz transit: According to Reuters, Oman has proposed introducing a voluntary fee for vessels transiting the Strait of Hormuz. The funds would be used to support navigation safety, environmental protection, and search-and-rescue operations, representing a potential step toward improving security along one of the world's most important energy shipping routes.
• Kazakhstan exports: Kazakhstan has resumed crude exports through the Caspian Pipeline Consortium (CPC) after the reopening of its Black Sea terminal.
• Japan exports: Japan is planning to join the rush to diversify oil export routes away from the Strait of Hormuz by investing in pipeline projects abroad, notably in the Middle East.

Closing statement: WTI remains under pressure as optimism over US-Iran negotiations and the resumption of Kazakh oil exports reduce supply concerns. Nevertheless, developments surrounding the Strait of Hormuz and ongoing geopolitical risks continue to make the energy market highly sensitive to new headlines.

• DAX 40 Price: Following a strong start to the week, the DAX 40 is showing signs of consolidation. Germany's benchmark index rose 0.5% to around 25,495 points at Tuesday's open after posting a 1% gain on Monday, as investors take a more cautious approach.
• Business confidence: Germany's July IFO Business Climate Index came in at 86.6, beating expectations of 86.0. While the Current Assessment component disappointed, the stronger-than-expected Expectations Survey suggests businesses are becoming more optimistic about the economic outlook.
• Mercedes news: Mercedes-Benz sold part of its remaining stake in Daimler Truck, generating approximately €417 million in proceeds during the second quarter.
• Rheinmetall news: According to Bloomberg, Germany is considering reducing ammunition spending next year in favor of investing in other military capabilities. The proposal could create additional challenges for Rheinmetall, one of the world's largest producers of 155 mm artillery shells, as investors reassess future defense demand.
• Energy costs: Commerzbank Chief Economist Dr. Jörg Krämer expects elevated energy prices to continue weighing on the German economy during the second half of 2026. He forecasts Germany's full-year economic growth at just 0.6%, highlighting the ongoing challenges facing Europe's largest economy.

Closing statement: The DAX 40 is consolidating after recent gains as investors digest encouraging business confidence data alongside concerns over slowing economic growth and potential reductions in defense spending. Corporate developments and persistent energy costs remain key factors shaping sentiment toward German equities.