The United States (US) Federal Reserve (Fed) announces its interest rate decision on Wednesday, another pivotal meeting for markets to gauge the stance of policymakers as they assess how rising crude Oil prices could impact the inflation outlook.

Michael Pfister of Commerzbank argues that subdued imported inflation and low exchange rate pass-through give the Swiss National Bank (SNB) little reason to tighten policy.

UOB’s SGD NEER model shows the index at 1.68% above the midpoint of the policy band, after ending the previous session 171 basis points above it. The model is expected to remain between 1.40% and 1.90% above the midpoint today, implying a USD/SGD trading range of 1.2898–1.2963.

According to Reuters, United States (US) President Donald Trump said in a phone interview with Fox News on Wednesday that the US would carry out further strikes against Iran in response to attacks targeting US positions in Jordan.

TD Securities strategists note that Australia’s Q2 Consumer Price Index (CPI) and June headline inflation came in below expectations, easing pressure on the Reserve Bank of Australia (RBA).

Brown Brothers Harriman’s Elias Haddad expects the Federal Open Market Committee to keep the federal funds target range unchanged at 3.50%-3.75% for a fifth consecutive meeting.

Commerzbank’s Michael Pfister analyses how the Swiss National Bank’s recent shift toward tolerating a weaker Swiss Franc affects inflation and EUR/CHF.

United States MBA Mortgage Applications down to -6.4% in July 24 from previous 1.9%

According to a Reuters report, Yemen's Houthis are considering imposing fees on commercial ships sailing through the Southern Red Sea. The report also shows that Houthis might exempt China's shipping fleet from any fee system.

UOB Global Economics & Markets Research notes that the Federal Reserve is widely expected to keep the Federal Funds Target Rate at 3.50%-3.75% at the July FOMC meeting.

TD Securities strategists expect the Bank of Canada’s (BoC) Summary of Deliberations to shed light on the July decision, focusing on how policymakers view inflation amid recent energy price moves and Consumer Price Index (CPI) forecast revisions.

Commerzbank’s Volkmar Baur notes that weaker-than-expected Australian inflation has sharply reduced market-implied odds of an August RBA rate hike and pushed the AUD lower.

The remarks from European Central Bank (ECB) policymaker and Governor of the Central Bank of Cyprus, Christodoulos Patsalides, released during the European trading session on Wednesday signal a warning of further acceleration in inflationary pressures if oil prices remain higher.

ING’s Michiel Tukker expects the Federal Reserve (Fed) to keep rates on hold, even as markets price a 30% chance of a hike. He notes that any decision will move United States (US) rates and influence global curves.

MUFG’s Lee Hardman notes that the Australian Dollar, a beneficiary of AI-related demand, has weakened after another softer-than-expected Australian Consumer Price Index (CPI) release.

DBS Bank’s Philip Wee notes that Dollar bulls have built substantial long USD positions ahead of the FOMC, encouraged by Brent’s sharp rebound and expectations of a surprise rate hike by Chairman Kevin Warsh.

Deutsche Bank’s US economists expect the Federal Reserve to leave rates unchanged at a highly uncertain FOMC meeting, with markets pricing a significant chance of a hike.

Here is what you need to know on Wednesday, July 29:

BNY’s Geoff Yu highlights that INR faces strong selling pressure from a rebalancing perspective, as Indian bonds have outperformed major peers. With INR flows broadly flat, FX exposure has risen and investors are advised to keep hedging elevated after strong duration gains.

Iraqi Prime Minister (PM) Ali Faleh al-Zaydi has called for an urgent security meeting on Wednesday following joint military operation from Saudi Arabia and the United States (US), according to a statement.

Deutsche Bank analysts note that lower oil prices and bond yields supported US equities, helping the equal-weighted S&P 500 reach a record high as investors rotated into defensive and non-tech sectors.

According to a senior official from Iran, the nation doesn’t support Oman's proposal for regional joint management of Strait of Hormuz, a critical chokepoint for almost 20% of global energy supply.

ING’s Chris Turner and Padhraic Garvey expect the Bank of Japan to keep its policy rate at 1.00% on 31 July, with any modestly hawkish shift seen as unlikely to materially boost the Yen or change the USD/JPY trajectory.

The South Korean Won (KRW) extends gains for the second consecutive day against the US Dollar (USD), and is set for a 6.5% monthly rally. Strong South Korean macroeconomic data and market expectations of monetary tightening by the Bank of Korea have offset the KOSPI Index’s sell-off.

USD/IDR depreciates after two days of gains, trading around 18,120 during the Asian hours on Wednesday. However, the pair has lost ground as the US Dollar (USD) struggles ahead of the Federal Reserve’s (Fed) upcoming policy decision.

In European trade on Wednesday, the Iranian Islamic Revolutionary Guard Corps (IRGC) announces that it fired several ballistic missiles at a United States (US) air base and the military Central Command (CENTCOM) center in Jordan.

Gold prices fell in India on Wednesday, according to data compiled by FXStreet.

GBP/USD edges higher after remaining flat in the previous day, trading around 1.3300 during the Asian hours on Wednesday. The currency pair gains ground as the US Dollar (USD) struggles ahead of the Federal Reserve’s (Fed) upcoming policy decision.

US Central Command: carried out precision strikes in Iraq targeting Iran-backed groups planning attacks on US forces and Saudi oil facilities.

USD/JPY loses ground after registering minor gains in the previous day, trading around 163.70 during the Asian hours on Wednesday. The pair may regain ground as the Japanese Yen could come under pressure from rebounding oil prices.