reports
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Sterling faces dual risks on Budget day
The UK Budget announcement (12.30 GMT) will see markets weigh both fiscal and inflationary implications. Sterling faces moderate downside risks in a non-inflationary, fiscally tight scenario, and severe risks if fiscal sustainability is called into doubt. Elsewhere, the dollar has more potential to depreciate despite yesterday's correction
- Francesco Pesole
Treasury FX Report preview: Tighter scrutiny, no manipulator tags
The November FX Report has been delayed but should be released soon. We expect an emphasis on the changing approach towards a tighter scrutiny on US partners' FX practices, but we don't think we'll see any FX manipulator designation by Treasury. Thailand should, however, join the Monitoring List, and Switzerland will remain a focus point for markets
- Francesco Pesole
Treasury FX Report preview: Tighter scrutiny, no manipulator tags
The November FX Report has been delayed but should be released soon. We expect an emphasis on the changing approach towards a tighter scrutiny on US partners' FX practices, but we don't think we'll see any FX manipulator designation by Treasury. Thailand should, however, join the Monitoring List, and Switzerland will remain a focus point for markets
- Chris Turner
- Francesco Pesole
FX Daily: The dollar is due a correction
A December Fed cut is back as a baseline scenario for markets, but the dollar has remained relatively strong. Our short-term valuation metrics point to significant risks of a USD correction, unless data prompts a hawkish repricing. Geopolitics will remain in focus, both for European FX (Ukraine peace talks) and the yen (Japan-China tensions over Taiwan)
- Francesco Pesole
Reserve Bank of New Zealand preview: Last cut of the cycle
We expect the Reserve Bank of New Zealand to cut rates by 25bp to 2.25% on 26 November. However, upside risks to inflation and growth mean, in our view, that this will be the last cut of the cycle. With markets still speculating on further easing, there is room for NZD to benefit from a more hawkish RBNZ assessment this week
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Prospects of Ukraine peace starting to show
We've been here before, but prospects of a peace deal in Ukraine are starting to show in FX. CEE FX is holding last week's gains, and EUR/CHF is now also edging back above 0.93. Lower energy prices should be supportive for the euro. Further progress on peace discussions and potentially a softer Fed Beige Book on Wednesday could see EUR/USD hold 1.1500
- Chris Turner
- Francesco Pesole
FX Daily: EUR/USD hanging in there
It could have been a lot worse for EUR/USD this week. A set of FOMC minutes that poured cold water on a December rate cut and a strong headline rise in the US jobs report could have seen 1.1500 taken out again. But instead, investors seemed to have just delayed rather than abandoned pricing for Fed easing. And Europe may still being showing some signs of life
- Chris Turner
- Francesco Pesole
FX Daily: Dollar rally overdone despite December's cut in doubt
EUR/USD has dropped significantly more than what the swing in rate differentials can justify. So, while a December Fed cut has clearly decreased in probability, there are downside risks for the greenback ahead of today's payrolls. A bad payroll print could prompt FX intervention on USD/JPY, which has kept marching towards 160
- Chris Turner
- Francesco Pesole
FX Daily: Bracing for the tech shock
Global markets are trading in a slightly nervous fashion as they brace themselves for a potential correction in US tech stocks. So far, the correction has been modest compared to the 25% fall in bitcoin, but events over the next 24 hours will have a say in whether moves extend. We'll have FOMC minutes, Nvidia earnings and the September jobs report
- Chris Turner
- Francesco Pesole
FX Daily: Yen missing out on equity sell-off
The souring in risk sentiment before tomorrow's Nvidia earnings is hitting high-beta currencies and offering some support to the dollar ahead of Thursday's September jobs reports. The yen is being held back by escalating tensions between China and Japan, as well as soft data and speculative flows testing the intervention threshold
- Chris Turner
- Francesco Pesole
FX Daily: Fed looks better priced
In a week when we should finally start to see US data releases coming through, it is important to note that the outcome of the next Fed rate decision in December looks better priced at a 50% chance of a cut. That means that the dollar probably does not have to rally too much on the FOMC minutes released this Wednesday and can take its cue from Thursday's jobs report
- Chris Turner
- Francesco Pesole
FX Daily: Fiscal risk hitting the pound
The drop in USD this week seems to be linked to expectations that US data will come in soft. But hearing Fed speakers, the move seems a bit premature, even if it looks like we could get September payrolls data soon. In the UK, the government is scrapping its income tax hike plans. GBP downside risks have suddenly increased
- Chris Turner
- Francesco Pesole
FX Daily: Japan may wait for US data to intervene in FX
USD/JPY continues to test the highs in a low-volatility, risk-on environment. Key US data won't be released as soon as the government reopens, but Japan may wait for a USD-negative event to intervene. Meanwhile, UK growth underwhelmed, adding some pressure to GBP, which is already hit by political risk. Strong jobs data support our bullish AUD view
- Francesco Pesole
- Chris Turner
- Deepali Bhargava
- Francesco Pesole
- James Wilson
- Chris Turner
- Francesco Pesole
FX Daily: Carry trade is proving persistent
The carry trade suffered a stress test yesterday, when one popular target currency, the Hungarian forint, had to cope with prospects of wider budget deficits. After selling off 0.7%, the forint is already coming back bid. With volatility expected to stay low, it's hard to see any major unwinds of carry strategies in the near term
- Chris Turner
- Francesco Pesole
FX Daily: Bittersweet government reopening for the dollar
The US government shutdown looks likely to end in the coming days, with a House vote now the final hurdle. The implications for FX are mostly visible in high-beta currencies, and there are no clear-cut directional implications for the dollar. Meanwhile, soft UK jobs data should endorse more dovish repricing of BoE expectations ahead of the Budget
- Adam Antoniak
- Chris Turner
- David Havrlant
- Deepali Bhargava
- Dmitry Dolgin
- Ewa Manthey
- Francesco Pesole
- James Wilson
- Lynn Song
- Mateusz Sutowicz
- Min Joo Kang
- Muhammet Mercan
- Peter Virovacz
- Rafal Benecki
- Stefan Posea
- Valentin Tataru
FX Outlook 2026: Play the ball, not the man
If 2025 has been about trying to second-guess the moves of the Trump administration, 2026 should reflect more of a return to currency fundamentals. That may mean less focus on the big dollar trend as the Fed drops rates to neutral and keeps them there. Lower volatility should generate even more interest in carry
- Chris Turner
- Francesco Pesole
FX Daily: Shutdown progress gives risk a lift
Risk assets have been helped over the weekend by news that a group of moderate Democrat senators are softening their stance on the US government shutdown. There is still a long way to go here, but we should know over the next couple of days whether the current compromise bill has legs. Expect subdued FX trading, however, given the lack of US data
- Chris Turner
- Francesco Pesole
FX Daily: More noise than signals for the dollar
It has been a mixed week for the dollar, where early-week strength finally eased a little yesterday on indications of softer US jobs data. Yet with the US government shutdown ongoing, we are still in the dark about the true labour market picture. Expect more $ consolidation and focus on regional stories such as soft China trade data and the Canada jobs release
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