reports
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: The search for dovish validation continues
Yesterday's US data was a mixed bag, failing to unequivocally endorse the recent speculation on Fed rate cuts. Today, focus will be on the PCE, personal spending and more Fedspeak. EUR/USD has its sights on 1.20, but the path to get there remains very conditional on US-related factors
- Francesco Pesole
EUR/USD: 1.20 is in sight – how do we get there?
The dollar's bearish march has continued after the Middle East crisis brought scattered, short-lived support. EUR/USD has broken 1.170 and is setting its sights on 1.20. The recent short-term rate swings have increased the upside risks, but something needs to happen on tariffs, Treasuries or the Fed for a run to 1.20
- Bert Colijn
- Francesco Pesole
- Warren Patterson
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Data holds the key to FOMC balance
We expect the dollar to become more sensitive to data in the near term, as markets seek a catalyst to double down on recent dovish Fed speculation. Employment figures may be subject to closer examination, with the rationale that a softer jobs market can convert a few hawks after mild inflation failed to do so. EUR/USD continues to face upside risks
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Refocusing on US macro
Markets seem to be trusting the ceasefire between Iran and Israel, and the dollar is back to testing its lows. Expect US data to play a bigger role from here, especially since Fed Chair Powell's cautious stance during his Congressional testimony included some subtle dovish hints. Dollar downside risks persist
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Focus shifts from Middle East to Powell
Iran and Israel have agreed to a ceasefire, and markets had already started pricing out geopolitical risk yesterday as Iran's retaliatory strikes against the US appeared measured in size. The dollar is facing fresh pressure on the back of plummeting oil prices, and downside risks for USD remain elevated ahead of Fed Chair Powell's testimony later today
- Bert Colijn
- Carsten Brzeski
- Francesco Pesole
- James Knightley
- Padhraic Garvey
- CFA
- Peter Vanden Houte
- Warren Patterson
US strikes on three nuclear facilities in Iran: What it means for macr...
While the broader impact of the US strikes on Iran's nuclear facilities remains uncertain, markets have so far responded with caution. What is clear, however, is that the strikes are likely to heighten economic uncertainty and put upward pressure on oil prices
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Geopolitics impact on FX remains contained
The dollar is trading higher this morning after the US strikes on Iran. But the moves still look quite small in FX, which suggests lingering reluctance to unwind strategic USD shorts, as well as market hopes for a potential de-escalation. Oil remains the key driver for FX, but data and Fed Chair Jay Powell's testimony are also in focus this week
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Dollar fails to stay supported on geopolitical risk
The dollar has lost some momentum as oil prices corrected slightly lower, and markets still struggle to gauge the probability of the US joining the Middle East conflict. EUR/USD may stabilise now that it's back at 1.150. Elsewhere, yesterday's surprise Norges Bank cut means two more reductions in 2025 are possible
- Francesco Pesole
- James Smith
- Francesco Pesole
- James Smith
- Francesco Pesole
Norges Bank rate cut isn't that surprising
We had argued that this was the best possible time to cut, and while we thought August was more likely, today's non-consensus cut makes a lot of sense from a macro perspective. We expect two more by year-end, but this doesn't automatically mean a weaker krone
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Big central bank day amid geopolitical volatility
We expect a 25bp cut in Switzerland, and holds in the UK, Norway and Turkey. But the main driver for FX remains the Middle East situation and implications for oil prices. The dollar is likely to remain in a strong position to extend its gains, although we doubt this will translate into long-term USD support
- Francesco Pesole
- James Knightley
- Padhraic Garvey
- CFA
Fed still leans in the direction of cuts, but timing will be delayed
While the policy interest rate was left unchanged, Fed officials are still suggesting rate cuts are likely this year. However, we are doubtful that a majority will be convinced on the case for cuts before December, by which time they may feel the need to move by a more aggressive 50bp cut
- Francesco Pesole
- James Knightley
- Padhraic Garvey
- CFA
Fed still leans in the direction of cuts, but timing will be delayed
While the policy interest rate was left unchanged, Fed officials are still suggesting rate cuts are likely this year. However, we are doubtful that a majority will be convinced on the case for cuts before December, by which time they may feel the need to move by a more aggressive 50bp cut
- Francesco Pesole
- James Knightley
- Padhraic Garvey
- CFA
Fed still leans in the direction of cuts, but timing will be delayed
While the policy interest rate was left unchanged, Fed officials are still suggesting rate cuts are likely this year. However, we are doubtful that a majority will be convinced on the case for cuts before December, by which time they may feel the need to move by a more aggressive 50bp cut
- David Havrlant
- Deepali Bhargava
- Dmitry Dolgin
- Francesco Pesole
- Lynn Song
- Mateusz Sutowicz
- Min Joo Kang
- Muhammet Mercan
- Peter Virovacz
- Valentin Tataru
FX Talking: Will the real safe haven please stand up?
In June's edition of our latest FX views and forecasts, we're focusing on why EUR/USD may not need to rush higher in the near term, how the yen remains an attractive bet in the longer run, and how domestic factors can start to take a more central role in FX now that markets are becoming accustomed to a weak dollar environment
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Oil dominates FX, Fed impact secondary
Markets are now speculating on a US military intervention in Iran, and oil prices are jumping again. This has triggered a renewed safe-haven appeal for the dollar, although this appears dependent on the ongoing extraordinary circumstances. Today, the Fed can give the USD some additional support, but it will still play a secondary role to geopolitics
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Trade headlines from Alberta can help the dollar
The main story in FX remains the rapidly evolving Middle East conflict. If oil prices correct further due to perceived limited supply risk, the dollar can follow suit and move lower. However, some USD-supportive trade news may emerge from the G7 summit in Canada. Elsewhere, the Bank of Japan kept rates on hold, with the yen muted on hawkish signals
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