What Traders Are Watching This Week
Markets are starting the week with the US dollar under pressure as weaker economic data reduces expectations for a September Federal Reserve rate hike. Oil prices remain relatively steady despite uncertainty surrounding US-Iran relations. In the UK, unemployment and inflation data could drive short-term volatility in GBP pairs this week.
The US Dollar Index Falls as Fed Rate-Hike Expectations Ease
The US dollar started the week on the back foot after weaker economic data prompted traders to reduce expectations for an imminent Federal Reserve rate hike.
Friday’s US retail sales report contributed to the shift. Sales unexpectedly fell 0.6% in July, the first monthly decline since October 2025 and the largest since May 2025.
Markets now price roughly a 30% probability of a September increase, compared with around 50% a week earlier, according to CME FedWatch.
Oil Holds Near Recent Levels as US-Iran Talks Stall
Oil prices saw limited net movement on Monday despite renewed uncertainty surrounding US-Iran relations.
The current US-Iran memorandum of understanding is due to expire, while negotiations between Washington and Tehran have made little visible progress. Iranian Foreign Minister Abbas Araghchi said Tehran had not decided whether to restart negotiations with the United States.
However, crude prices have so far shown a relatively contained response. With a substantial geopolitical risk premium already reflected in oil following recent disruptions, traders may be looking for a material change in shipping flows, production or infrastructure before repricing crude more aggressively.
Oil Holds Near Recent Levels as US-Iran Talks Stall
Oil prices saw limited net movement on Monday despite renewed uncertainty surrounding US-Iran relations.
The current US-Iran memorandum of understanding is due to expire, while negotiations between Washington and Tehran have made little visible progress. Iranian Foreign Minister Abbas Araghchi said Tehran had not decided whether to restart negotiations with the United States.
However, crude prices have so far shown a relatively contained response. With a substantial geopolitical risk premium already reflected in oil following recent disruptions, traders may be looking for a material change in shipping flows, production or infrastructure before repricing crude more aggressively.
Economic Data
UK data takes centre stage this week.
UK Unemployment Rate — Tuesday, 18th August at 09:00 GMT+3
The UK unemployment rate is expected to edge down to 4.8% from 4.9%.
Recent recruitment indicators suggest some stabilisation, although employers remain cautious about adding staff. Wage growth will also be closely watched after regular pay growth slowed to 3.4% year-on-year in the previous report, while total pay increased 4.3%.
For GBP traders, the combination of unemployment and wage growth could be more significant than the headline unemployment rate alone.
UK Inflation Rate — Wednesday, 19th August at 09:00 GMT+3
UK headline CPI is expected to accelerate to 2.9% year-on-year in July from 2.6%, while monthly inflation is forecast at 0.3%, compared with 0.1% previously. Core CPI is expected to ease slightly to 2.5% from 2.6%.
Higher household energy costs following the 13% increase in Ofgem’s energy price cap are expected to contribute to the increase in headline inflation.
A meaningful deviation from expectations could generate short-term volatility in GBP pairs as traders reassess the inflation outlook.
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*Tips and analytics do not constitute a call to trade, trading advice or recommendation and are for information only.
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