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Friday’s soft nonfarm payrolls report added further ammunition to the doves in the Federal Reserve, and rate markets continued pushing back their expectations of hikes in the US.

July was a relatively calm month in the foreign exchange market before activity exploded into life at the eleventh hour.

Uncertainty surrounding last week's Federal Reserve meeting was unusually high. In the end, not only did the Fed not raise rates, but chair Warsh sounded rather dovish.

The Iran war has dragged on for longer than markets had anticipated in the spring, which is creating a challenging backdrop for emerging market currencies.

Markets are finally beginning to take notice of the renewed US-Iran hostilities and surge in oil prices, which last week jumped back above $100 a barrel.

The latest flare up in tensions between the US and Iran failed to trigger any significant safe haven flows in currency markets, or in any financial markets for that matter.

The half time whistle has sounded on 2026, drawing to a close an eventful first six months of the year that will predominantly be remembered for the elevated geopolitical risk premium associated with the Iran war.

The dollar rally that has lasted since early May seems to be petering out.

A pull back in risk sentiment saw stocks markets drop globally last week, led by the big winners of the last few years, technology companies.

The Fed, now under the stewardship of the new chair Kevin Warsh, seems considerably more concerned about inflation than markets expected, if his first press conference at the helm is anything to go by.

Markets have been cheering the US-Iran framework deal to end their conflict, which sent oil prices to the lowest levels since the early days of the conflict.

Investors will be forgiven for having half an eye on the sports pages this month as the 2026 FIFA World Cup kicks off, bringing the usual mix of drama and excitement. That said, financial markets are set to serve up a spectacle of their own.