Central Bank Watchlist: July 2026 Meeting Expectations

Key Points

• Five central banks will shape the late-July forex outlook, with the biggest signals likely to come from guidance, voting splits, and clues about where policy moves next.
• Any shift in those expectations could create fresh directional catalysts for EUR/USD, GBP/USD, USD/JPY, and USD/ZAR as traders reassess relative rate paths.
• Inflation, energy prices, growth, and geopolitics remain the key swing factors, and hawkish or dovish surprises could quickly trigger fresh volatility across the forex market.

The dollar has regained momentum this summer, but the late-July policy calendar could put that strength to the test. Starting July 23, five major central banks will deliver interest rate decisions in quick succession, giving traders a concentrated series of signals about where global interest rates—and several key currency pairs—may head next.

Here is how the July calendar lines up:

• European Central Bank (July 23)
• South African Reserve Bank (July 23)
• Federal Reserve (July 29)
• Bank of England (July 30)
• Bank of Japan (July 30–31)

Check out the full economic calendar.

For now, however, the focus is on the four currency pairs directly tied to the late-July meetings: EUR/USD, USD/ZAR, GBP/USD, and USD/JPY.

What Markets Expect From the July Meetings

European Central Bank (July 23)

The European Central Bank resumed tightening in June, lifting its deposit rate by 25 basis points to 2.25% after revising its inflation forecasts higher. The question now is not whether policymakers remain concerned about inflation, but how soon they may decide another increase is necessary.

Markets see little chance of a second consecutive hike in July. June inflation came in slightly softer than expected, core inflation eased to 2.4%, and the ECB will not receive updated staff projections until September. That gives policymakers a strong case for waiting while they assess whether renewed pressure from oil prices begins spreading into wages, services, and broader consumer prices.

September presents a different setup. Markets assign more than an 80% probability to a quarter-point hike at that meeting, with one or two increases still implied before year-end. A July hold would therefore come as little surprise, leaving the ECB’s assessment of the path ahead as the more important signal for traders.

A hawkish message suggesting that another increase was seriously considered—or that September remains the likely window for action—could reinforce expectations for further tightening and support EUR/USD. A softer tone that reduces the urgency to move again could prompt traders to reassess one of the market’s firmer policy expectations and leave the euro more vulnerable against the dollar.

South African Reserve Bank (July 23)

The South African Reserve Bank has also started raising rates, increasing its repo rate by 25 basis points to 7.00% in May. That was its first hike in three years, and policymakers discussed a larger move before settling on the quarter-point increase.

A hold appears to be the more likely July outcome, but the decision remains unusually close. Inflation rose to 4.5% in May and is expected to move toward 4.7% in June, while renewed conflict in the Middle East and higher oil prices have increased the risk of further pressure. At the same time, weaker growth gives policymakers a reason to avoid tightening too aggressively.

That leaves both the inflation release and the vote particularly important. A hold accompanied by another divided decision and a clear warning that further tightening remains possible would be relatively hawkish and could help limit additional upside in USD/ZAR. An unexpected rate increase would provide an even stronger near-term boost to the rand.

A dovish hold would carry more downside risk for the currency. If policymakers place greater weight on weak growth and show less urgency about inflation, the rand could remain exposed to higher oil prices, risk aversion, and continued dollar strength.

Federal Reserve (July 29)

The Federal Reserve has remained on hold throughout 2026, keeping the federal-funds target range at 3.50% to 3.75%. The June meeting nevertheless showed a committee split over the next move, with half of the policymakers submitting projections supporting unchanged or lower rates and the other half anticipating at least one increase before year-end.

Markets currently assign more than an 80% probability for another hold in July. Softer June inflation and weaker payroll growth have reduced the immediate need to tighten, even as Chair Kevin Warsh continues to emphasize that inflation remains too high. Financial conditions also remain relatively loose, giving the Fed reason to stay alert without necessarily acting this month.

The September outlook is much less settled. Markets are pricing approximately a 50% chance of a quarter-point hike, making the July message more important than the decision itself. A hawkish hold that emphasizes persistent inflation and keeps September firmly in play could lift Treasury yields and support the dollar across the major pairs.

A softer message would represent the more meaningful surprise. If the Fed places greater weight on cooling inflation and weaker employment—or appears less inclined to raise rates this year—the dollar could give back some of its recent strength. Warsh’s reduced reliance on forward guidance may make those signals less explicit, however, increasing the potential for volatility as traders interpret the statement and press conference.

Bank of England (July 30)

The Bank of England has held the Bank Rate at 3.75% through the first four meetings of 2026 after cutting rates four times in 2025. Its June decision passed by a 7–2 vote, with two members preferring a quarter-point increase.

Another hold remains the expected outcome in July. UK inflation has not accelerated as sharply as feared, wage growth is easing, and policymakers remain reluctant to raise borrowing costs against a relatively weak economic backdrop. The June inflation release on July 22 will help determine whether those arguments remain persuasive.

Markets have nevertheless begun pricing some possibility of a hike in September or November, although the odds remain below 50%. That means a July hold would not settle the broader debate. The vote and the bank’s assessment of energy prices, services inflation, wages, and inflation expectations will matter more.

A shift to a 6–3 or 5–4 vote would show that support for tightening is building and could help GBP/USD challenge the upper end of its recent range. A more dovish hold—particularly if the bank emphasizes weaker employment and treats the energy shock as temporary—could push expected hikes further into the future and weigh on sterling.

Bank of Japan (July 31)

The Bank of Japan raised its short-term policy rate from 0.75% to around 1.00% in June, taking rates to their highest level in roughly three decades. It has therefore already tightened this summer, and another increase at the July meeting is not the base case.

This month, the Bank of Japan is expected to hold while updating its economic projections and assessing the effects of the June move. The broader path still points toward further normalization, but policymakers have shown little indication that they are willing to accelerate simply to support the yen.

That makes the guidance around the next hike especially important. A cautious message emphasizing gradual adjustment would preserve Japan’s large yield disadvantage and could keep USD/JPY near its recent highs. A clearer suggestion that another increase is likely before year-end would help the yen recover, particularly if the Fed simultaneously sounds less hawkish.

The greater surprise would be any indication that the Bank of Japan is prepared to move faster than expected. While currency weakness alone may not force its hand, stronger concern about inflation, asset prices, or housing affordability could eventually support a more aggressive policy path. Such a shift would challenge the market’s assumption of slow normalization and could produce a sharp move lower in USD/JPY.

How July’s Rate Decisions Could Affect Key Currency Pairs

With the policy outlook established, the focus now turns to how those expectations could shape the four key currency pairs—and which price levels traders should watch most closely.

EUR/USD

For EUR/USD, the broader trend remains weak despite a modest rebound from the lows. The pair fell below 1.14 in mid-June and set a fresh 52-week low near 1.1325 before recovering to around 1.1420.

Near term, 1.1460 is the first upside level to watch, followed by 1.1500. To the downside, 1.1400 remains the key pressure point, with a break below it bringing 1.1325 back into focus.

USD/JPY

For USD/JPY, dollar strength is even more pronounced. The pair now trades around 163.00, a fresh 40-year high against the yen.

A continued break above that high could bring intervention risk more sharply into focus. On the downside, 162.00 is now the first level to watch. A move back below it would suggest the latest push is losing momentum, while 160.00 remains the more important marker for a broader reversal.

GBP/USD

For GBP/USD, the pair has traded between roughly 1.3160 and 1.3450 over the last month and now sits at the upper end of that range.

The first downside level is 1.3400, while 1.3500 remains the key upside threshold. A break above 1.35 would move sterling beyond its recent range and strengthen the near-term bullish case.

USD/ZAR

For USD/ZAR, price action has been more contained. The pair has traded mostly between 16.20 and 16.60 over the last month and currently sits around 16.45, slightly above the midpoint of that range.

A break below 16.20 could shift attention toward 15.70, while a move above 16.60 would open the door toward 17.20.

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Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.

You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Our curated playlists can help you stay up to date on current markets and understanding key terms. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.

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