Market Overview
As of 03:55 ET (07:55 GMT) on 3 August 2026, the British pound slipped 0.15% against the U.S. dollar, trading at 1.3462 USD. The euro also weakened, falling 0.03% to 1.1526 USD. The dollar’s resilience was notable because U.S. and Japanese authorities confirmed a rare joint intervention aimed at supporting the yen; Tokyo is estimated to have sold between $70 billion and $80 billion over the preceding three days.
Commentary and Expectations
Chris Turner, global head of markets at ING, observed that, “in theory, the dollar should be broadly weaker today,” citing the intervention and a softer oil backdrop, but added that a sustained sell‑off had not yet materialised. He further explained that the dollar’s strength is underpinned by stubborn expectations of further Federal Reserve rate hikes. After Fed Chair Kevin Warsh’s press conference last week, markets briefly priced less than 10 basis points of tightening for September, but later repriced expectations to a 16‑17 basis‑point hike.
Fixed‑Income Context
U.S. 30‑year Treasury yields remained above 5.20%, and the 30‑year mortgage rate rose to 6.75%. These rates reinforce the view that the Fed’s policy path will be influenced by upcoming U.S. labour market data.
Upcoming Economic Data
The week’s key U.S. data points include JOLTS openings on Tuesday, ADP employment on Wednesday, and non‑farm payrolls on Friday, with consensus forecasts of 75,000‑80,000 jobs added. ING’s base case suggests that a payroll figure near consensus would keep the DXY (dollar index) above the 100 level, while a sub‑50,000 reading would be needed to materially shift the dollar‑bearish outlook.
Euro and Yen Dynamics
Turner noted that the euro’s underperformance relative to the dollar may reflect solid euro‑zone hard data, lower oil prices, and heavy dollar‑selling from Japan, as well as U.S. Treasury activity in the EUR/JPY pair. He also mentioned that Washington may have sold the cross to avoid public explanation for dollar sales, referencing the roughly $13 billion of euro‑denominated FX reserves held by the Exchange Stabilisation Fund—a sum he described as “barely a drop in the ocean” compared with global flows.
Technical Levels
ING’s strategic pivot points for EUR/USD are set at 1.1615‑1.1620 on the upside and 1.1500 on the downside. The DXY’s support is near 99.35‑99.40, with a potential break back above 100 this week if the Fed’s September decision aligns with market expectations.
Conclusion
Overall, sterling’s decline was driven primarily by dollar‑side dynamics rather than any UK‑specific fundamentals, and the market will closely watch U.S. payroll data for clues on the Fed’s forthcoming policy stance.