India’s foreign exchange reserves have fallen to $688.87 billion as of July 28, down from $698.19 billion. This indicates a decline in the country’s reserves during this time. EUR/USD is hovering around 1.1650, with the US Dollar gaining strength ahead of expected inflation data. Statements from Federal Reserve officials and trade updates are influencing the movement of this currency pair.

Current Conditions of GBP/USD

GBP/USD is stabilizing around 1.3430, correcting from previous gains boosted by the Bank of England’s recent actions. A cautious market sentiment is bolstering the USD, affecting GBP’s performance. In commodities, gold is trading near $3,400 per troy ounce. A new US tax on specific types of gold bars is impacting current gold prices. In the cryptocurrency space, Bitcoin has reached a resistance level of $118,000 before settling around $116,525. Ethereum and XRP have shown strength, indicating a general upward trend in the market. The Bank of England has lowered rates by 25 basis points to 4%, signaling that this reduction cycle may be coming to an end. Concerns about ongoing inflation, which is above the target, persist.

Impact of Forex Rate Cuts

With India’s foreign exchange reserves dropping, we expect possible volatility in the rupee. This decrease suggests that the Reserve Bank of India might be defending the currency, similar to actions taken during the global tightening in 2022. Derivative traders should consider options strategies that could benefit from significant price movements in the USD/INR pair in the coming weeks. For EUR/USD, the focus is on the upcoming US economic data as the dollar’s strength heavily influences the pair. The latest US Consumer Price Index data from August 7, 2025, revealed headline inflation at 3.5%, which was slightly above forecasted figures. If this trend persists, the dollar’s momentum could push the euro below key support levels. The Bank of England’s rate cut was anticipated, but their indication that the reduction cycle may be nearing its close is crucial. UK inflation remains persistent, with the latest figures at 3.1%, making further cuts unlikely and providing support for the pound. However, given the dollar’s strength, we see opportunities to initiate short positions on GBP/USD when there are rallies. Gold’s stability around $3,400, despite a strong dollar, highlights its role as a hedge against ongoing inflation over the years. The new US tax on certain gold bars is a unique factor that may create pricing gaps between futures contracts and physical assets. We are monitoring these discrepancies but remain cautious, as higher US interest rates could traditionally weigh down gold prices. In cryptocurrency, Bitcoin’s approach to the $118,000 resistance level is a key chart point to observe. The broader bullish trend is supported by on-chain data showing a net outflow of over 50,000 BTC from major exchanges last month, indicating a shift towards long-term holding. A clean break above this resistance could lead to a significant price surge, while a failure may result in a quick pullback. Create your live VT Markets account and start trading now.

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