Psychology for major markets July 31st

EUR/USD – EUR/USD holding the 1.08-1.09 range and broadly steady awaiting the FOMC meeting and US employment report later this week.

USD/JPY – USD/JPY dropped sharply to test 150 after the BoJ hiked rates more than expected to 0.25%. Downside risks remain with yield spreads still pointing lower, but FOMC an initial focus.

EUR/GBP – Remaining fairly steady just above 0.84 with the focus on the BoE MPC decision on Thursday

AUD/USD – AUD fell back after weaker CPI with the market now pricing a 50% chance of a rate cut by year end. But still hard to see a break below the bottom end of the year’s range at 0.64., and dip may well prove a buying opportunity.

Equities – Stabilising after losses over the last couple of weeks.