Foreign Exchange Market Update

August 19, 2026

Eurozone Inflation Rises to 2.9%

Euro traded at 1.1666 against USD at 9:00 AM PST

Eurozone inflation rose slightly in July due to the surge in energy prices. Inflation edged up from 2.8% in June to 2.9% in July. Core inflation, which excludes energy, food, alcohol, and tobacco, rose from 2.4% to 2.5% in the previous month.

Monthly, the harmonized index of consumer prices (HICP) climbed 0.2% in July, as initially estimated. Among components of HICP, energy posted the biggest annual increase of 10.3%. This was followed by a 3.3% rise in services. Food, alcohol, and tobacco prices rose 1.2%, and non-energy industrial goods prices grew 0.9%.

Last month, the European Central Bank (ECB) left its key interest rates unchanged after raising them for the first time in nearly three years in the previous session. The deposit rate was retained at 2.25%, the refinancing rate at 2.40% and the marginal lending rate at 2.65%. 08/19/2026 - 05:26:00 (RTTNews)

United Kingdom Inflation Rises on Household Energy Bills

British Pound traded at 1.3609 against USD at 9:00 AM PST

U.K. consumer price inflation accelerated in July as the Middle East crisis stoked household energy prices. The consumer price index (CPI) posted an annual growth of 2.9% in July, faster than the 2.6% rise in June. Monthly, consumer prices moved up 0.3%, following a 0.1% gain.

Core inflation, which excludes prices of energy, food, alcohol and tobacco, remained unchanged at 2.6% in July. The CPI goods annual rate rose from 1.7% to 2.2%, while services inflation eased from 3.6% to 3.4%. Housing and household services costs grew at a faster pace of 4.1% in July due to the rise in energy bills after the energy regulator Ofgem hiked the price cap.

Last month, the central bank maintained its benchmark rate at 3.75%, the lowest since June 2023. The bank had reduced the rate by 25 basis points each in August and November last year. As the rise in inflation is broadly in line with the BoE's expectations, the Monetary Policy Committee remains on track to keep rates on hold at its next meeting.

Factory gate inflation softened from 3.5% in June to 3.1% in July. Likewise, input price inflation eased sharply from 7.4% to 4.9% in the previous month. Further, monthly output rose 0.2% in July, up from a fall of 0.1% in June. At the same time, input prices fell 1.7% compared to a 1.9% decline in the prior month. 08/19/2026 - 09:05:00 (RTTNews)