Weekly market sentiment this week leans dollar-bullish, with the yen under severe pressure and risk assets mixed across indices and commodities.
Strength Dashboard
| Symbol | Rating | Reason |
|---|---|---|
| Currencies | ||
| GBP | Weak bearish | Softer inflation cooled near term hike bets. |
| USD | Strong bullish | Best week since mid June. |
| EUR | Neutral | ECB hold, September hike still priced. |
| JPY | Strong Bearish | Forty year low, only verbal defence. |
| AUD | Neutral | Wednesday inflation print decides direction. |
| NZD | Weak bullish | Hot CPI locks September RBNZ hike. |
| CHF | Weak bearish | SNB pushback blunting safe haven demand. |
| DXY | Strong bullish | Closed 101.47, near three week high. |
| Indices | ||
| S&P 500 | Weak Bearish | Down 0.6%, breadth better than headline. |
| Dow Jones | Neutral | Down 0.4%, defensives cushioned the fall. |
| Commodities | ||
| Gold (XAU) | Weak bullish | First weekly gain in three, $4,000 held. |
| Oil (Brent) | Weak bullish | Weekly surge fading as Hormuz talks progress. |
Geopolitical Spotlight
This week’s weekly market sentiment shifted sharply mid-week as Washington paused airstrikes and Hormuz talks progressed.
The US and Iran war reached its 147th day on Friday, and it drove almost everything this week. Iran aligned Houthi forces attacked two Saudi oil tankers in the Red Sea. That put a second major shipping route at risk, on top of Iran’s existing restrictions on the Strait of Hormuz. Brent crude topped $102 intraday on Thursday, its first move above $100 since May.
Higher oil fed straight into inflation expectations. The US 10 year yield rose 14 basis points on the week to 4.679%, an 18 month high, and the dollar index gained 0.7%. Gold, equities and the yen all took their cue from that same driver.
Then the tone changed. Washington paused its airstrikes after 13 consecutive nights, and Oman and Iran talks on reopening Hormuz made progress. Brent fell 3.9% on Friday alone. Separately, the US confirmed new 10% and 12.5% tariffs on 60 trading partners including the EU.
The strike pause is now the biggest single variable for markets. Netanyahu visits Washington this week, and whether Israel rejoins the strikes will shape the oil tape. If an interim Hormuz arrangement is confirmed, oil moves first and the dollar follows. Watch whether Brent holds above $90 on Monday’s open.
Forex Markets
Weekly market sentiment in the forex space was dominated by dollar strength and yen weakness.
The dollar was the clear winner. DXY closed at 101.47, up 0.7% and its best week since mid June. Strong data helped, with the flash composite PMI at 53.6 and jobless claims posting their steepest drop in nearly six decades.
The yen was the mirror image. USD/JPY touched 163.98 on Thursday, a 40 year high, and closed at 163.82. That is the yen’s worst week since May. Finance Minister Katayama repeated that Japan is ready to act, but talk alone has not slowed it.
Sterling fell around 0.9% to 1.3325. UK June inflation cooled to 2.6%, below the 2.7% expected and the lowest since March 2025. The euro slipped to 1.1372 after the ECB held all three rates on Thursday in a unanimous vote, with a 10 September hike still favoured.
The franc lagged despite the war headlines, because the SNB holds at 0% and keeps signalling it will intervene against franc strength. The Aussie closed at 0.6973, its first weekly loss in a month. The kiwi hit a seven week high near 0.5860 on Tuesday after Q2 inflation printed 4.1%, then faded to 0.5783.
Currencies to watch
USD/JPY. Three central banks decide in three days while the pair sits at a 40 year high. Above 164 the intervention risk stops being theoretical. Any BoJ hint of another hike on Friday could snap it lower fast.
NZD. The RBNZ has already lifted the cash rate to 2.5% and a September move is close to fully priced. The kiwi has the cleanest policy story among the commodity currencies right now.
GBP. The BoE decides Thursday with a full Monetary Policy Report attached. With inflation softer against a previous 7 to 2 hold vote, the vote split is the number that matters, not the rate.
Overall weekly market sentiment remains dollar-bullish heading into a packed event week.Three rate decisions land inside 72 hours, and all three are expected to hold, so the language matters more than the number. Markets now put roughly a one in three chance on a Fed hike this week and above 80% by September. That repricing is what has been carrying the dollar. Watch 163.98 on USD/JPY, because a clean break invites Tokyo to act.
Indices
Rising yields did the damage. The Nasdaq fell 2.1% to 24,975 and the semiconductor index dropped 4.25%. The S&P 500 lost 0.6% to 7,411. The Dow held up best, down just 0.4% to 51,946, and actually gained 0.45% on Friday.
That gap tells the story. Money moved out of high multiple tech and into value and defensives. On Friday nearly all eleven S&P sectors closed higher, led by REITs, materials, healthcare and consumer staples, yet the averages still finished mixed because technology sold off late.
Earnings added to the pressure. Results from Alphabet and Tesla reopened the debate over whether AI spending is running ahead of AI returns, and that question spread through the chip names. Intel was the exception, posting its strongest revenue growth in more than fifteen years. This looks like rotation, not a broad exit from risk.
Next week is dense. The FOMC decides Wednesday, Microsoft and Meta report the same day, then Apple and Amazon follow on Thursday alongside advance Q2 GDP and core PCE. The Nasdaq has just lost the 25,000 handle, so whether it reclaims that early in the week is the first tell. Watch the 10 year yield, because equities have taken their cue from it all month.
Gold & Oil
Gold finally steadied. Spot settled at $4,052.98, up about 0.9% on the week and its first weekly gain in three. It was not a smooth ride. Bullion reached a two week high of $4,165.87 on Wednesday, then dropped below $4,100 on Thursday as yields climbed. Buyers stepped in around $4,000, a level that has now held twice.
Gold is caught between two forces. Oil driven inflation is a reason to own it, but rising real yields raise the cost of holding an asset that pays nothing.
Oil was the week’s biggest mover. Brent topped $100 for the first time since May, reaching roughly $102 intraday on Thursday, before settling Friday at $96.78 after a 3.9% drop. WTI ended at $89.31. Crude is up around 32% this month. The drivers were the Houthi tanker attacks, Iran’s Hormuz restrictions and the US naval blockade of Iranian ports. Friday’s reversal came purely on mediation headlines.
Gold needs a convincing break above $4,200 to change character, and $4,000 stays the floor that matters. For Brent the weekend strike pause is the swing factor, and a confirmed Hormuz arrangement would take the war premium out quickly. The Fed’s language on energy driven inflation on Wednesday moves both. Watch how Brent opens Monday against Friday’s $96.78 settlement.
Week in Review
- The dollar index rose 0.7%, its best week since mid June.
- Brent topped $100 for the first time since May, then fell 3.9% Friday.
- The Nasdaq dropped 2.1% as the semiconductor index lost 4.25%.
- The ECB held all three rates on 23 July, keeping September live.
- The yen hit a 40 year low of 163.98 against the dollar.
- Fed decision Wednesday 29 July, with Microsoft and Meta reporting the same day.
- Australian inflation Wednesday 29 July, after Bullock speaks Tuesday.
- Bank of England decision and Monetary Policy Report Thursday 30 July.
- US advance Q2 GDP and core PCE Thursday 30 July, plus Apple and Amazon.
- Bank of Japan decision and Outlook Report Friday 31 July, with eurozone flash inflation.
