Trump has signed an executive order that imposes new tariffs on dozens of countries, which will go into effect on August 7th. After the soft US jobs report last Friday, traders will be closely watching the Bank of England’s interest rate decision and Switzerland’s unemployment data for cues on monetary policy paths and economic resilience.
In this backdrop, GBPUSD and USDCHF may experience heightened volatility as investors position around policy divergence and growth signals.
The Bank of England is expected to cut interest rates by 25bp on Thursday.
So, investors will be looking for clues on future policy moves.
Note: The latest UK CPI report increased to 3.6% in June, up from 3.4% in May.
Traders are currently pricing in a 97% probability that the BoE cuts rates in August with the odds of another rate cut by November at 77%.
GBPUSD is forecasted to move 0.5% up or down 0.4% in a 6-hour window after the BoE rate decision.
Bloomberg’s FX model forecasts a 74.5% chance that GBPUSD will trade within the 1.3133 – 1.3446 range, using current levels as a base, over the next one-week period.
The Swiss unemployment rate will be key for CHF direction, especially after Trump slapped Switzerland with 39% tariffs. A weaker-than-expected figure may validate the SNB’s dovish stance, sending USDCHF higher toward resistance near 0.8240. On the flip side, an upside surprise could support CHF, pulling USDCHF down toward the 0.7900 area.
Here’s a comprehensive list of other key economic data and events due this week:
Monday, 4th August
Tuesday, 5th August
Wednesday, 6th August
Thursday, 7th August
Friday, 8th August
