Daily Analysis 26/08/2026

• GBP/USD Price: GBP/USD trades with a negative bias below the 1.3600 area during the European session, giving back part of Tuesday's strong advance.
• US-Iran: The Pakistan-brokered 60-day deadline under the June Islamabad memorandum expired without a final US-Iran settlement. However, mediation efforts involving Pakistan, Qatar and Oman continue, particularly around restoring the memorandum and establishing safe navigation through the Strait of Hormuz, keeping geopolitical risk elevated.
• Trade tensions: Canada has announced retaliatory tariffs of up to 50% on $20 billion of US imports following Washington's plans to raise tariffs on Canadian cars and auto parts.
• Labor market: US ADP preliminary employment data showed an increase of 11.8K jobs in the four weeks through August 8, up from 9.5K previously.
• Jackson Hole: With the Jackson Hole Economic Symposium beginning later this week, traders are increasingly focused on signals from Federal Reserve Chair Kevin Warsh.

Closing statement: GBP/USD retains a cautious near-term bias, with the pair correcting after Tuesday's gains while geopolitical and trade tensions support the Dollar. The main directional catalyst is likely to come from Jackson Hole, particularly any guidance from Fed Chair Warsh on the future path of US interest rates.

• XAU/USD Price: Gold is extending its two-way price action for a second consecutive day and trades below $4,650 during the European session.
• Fed's Collins: Fed official Susan Collins said inflation remains too high and that a rate increase could become appropriate if there is no evidence of sustained disinflation.
• Consumer confidence: The Conference Board's Consumer Confidence Index declined to 89.4 in August, below both the 91.2 market expectation and July's 90.8 reading.
• Fed communication: DBS Bank's Philip Wee highlighted uncertainty surrounding how Fed Chair Kevin Warsh will manage expectations without relying heavily on forward guidance.
• Treasury yields: The US Treasury's expanded bond-buyback strategy has contributed to another decline in US yields, while officials indicated that the nearly $1 trillion Treasury General Account could potentially be used to support the buybacks.

Closing statement: Gold remains range-bound but supported, with softer consumer confidence and declining Treasury yields offsetting the pressure from hawkish Fed rhetoric. The key near-term drivers will be US yields, Fed communication and expectations for future rate hikes, while $4,650 remains an important level for the next directional move.

• Crude Oil Price: Crude prices are trimming part of last week's gains, with WTI trading around $80.80 on Tuesday.
• Strait of Hormuz: Iran and Oman reportedly discussed establishing a temporary joint maritime corridor through the Strait of Hormuz, with technical negotiations expected to continue toward a permanent arrangement.
• Iran signals: Iranian Foreign Minister Abbas Araghchi said talks with Pakistan and Oman emphasized regional solutions, including a proposed framework involving joint mine-clearing operations and future management of the Strait.
• Hormuz traffic: Only five commodity vessels transited the Strait of Hormuz on Tuesday, compared with one previously, but volumes remain well below the 10-day average. At the same time, the API reported a 4.2 million-barrel increase in US crude inventories, versus a 0.3 million-barrel draw previously, adding fresh bearish pressure to the market.
• Canadian oil: Maintenance at Canadian oil-sands facilities could reduce crude production by around 300,000 barrels per day in September.

Closing statement: WTI faces mixed signals, with progress toward a potential Hormuz corridor and rising US inventories weighing on prices, while restricted shipping and upcoming Canadian production losses provide support. The next directional move will likely depend on whether Middle Eastern supply conditions improve faster than physical-market tightness develops.

• DAX 40 Price: Germany's benchmark DAX 40 is trading higher around 26,210 points this morning.
• German GDP: Germany's final Q2 GDP figures showed the economy expanded 0.3% quarter-on-quarter and 1.0% year-on-year, slightly improving on the preliminary 0.9% annual estimate.
• Merz signals: Chancellor Friedrich Merz said the cabinet will urgently discuss measures aimed at protecting domestic industry and restoring competitiveness.
• Business sentiment: Germany's Ifo business climate data delivered a positive surprise in August, with the current assessment rising to 88.5 and expectations climbing to 89.1, both above forecasts.
• Nvidia earnings: Investors are closely watching Nvidia's results, particularly given the recent debate over whether expectations for AI-related growth have become too demanding.

Closing statement: The DAX has a constructive fundamental backdrop, supported by stronger GDP and a significant improvement in German business sentiment. However, Nvidia's earnings and the outlook for German industrial competitiveness remain important near-term catalysts for the index.