reports
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Soft labour data holds back defensive dollar rally
What was noticeable yesterday was that US interest rates did seem to react to some softer labour market data. This week's re-pricing lower of the Fed's terminal rate has therefore taken the sting out of a potential defensive rally in the dollar. This could leave the dollar vulnerable into next week's US jobs data. And the ECB seems comfortable with EUR/USD
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Corrective forces in play
A burgeoning sell-off in US tech stocks and ongoing volatility in the metals markets are providing many cross-currents for FX. Yet interest rate volatility remains low, providing some insulation to those heavily invested in FX carry trades. Rate meetings in the eurozone, UK and Czechia are the focus for today's session, as is some second-tier US jobs data
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Data can trigger new leg up in USD
Our view for this week remains that data has the most potential to steer USD crosses, and today's busy US calendar offers a couple of opportunities. ADP payrolls will be watched closely given the delay in official data, alongside the ISM services survey. Our call is that decent-enough figures could take EUR/USD back below 1.180 in the next couple of days
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Bittersweet data delay for the dollar
USD found more support yesterday before coming under mild pressure overnight. Strong ISM manufacturing figures helped, and data should regain centrality, although payrolls will be delayed at least a week due to the partial shutdown. In Australia, the RBA hike was deemed quite hawkish: we don't fully agree, and AUD/USD may still be due a correction
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Attempting the re-basement trade
The dollar has recovered a bit further as gold and silver have plunged, and we think there is enough stability to let data do the talking in FX this week. The US calendar should culminate in decent payrolls/unemployment, opening the door to some more dollar upside. Elsewhere, the ECB may not discuss the euro much after all, while the RBA could hike tonight
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Warsh is the dollar lifeline, for now
Trump is widely expected to nominate Kevin Warsh as the new Fed Chair today. It's good news for the dollar, which can price out some risks of a more dovish pick. However, a new catalyst may be needed in the coming days to break decisively below 1.190 in EUR/USD. There are plenty of data releases in the eurozone today, but the FX impact may be limited
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Dollar not out of the woods yet
The dollar has shown signs of stabilising, but has struggled to stay bid on Bessent's ruling out JPY intervention and a slightly hawkish Fed. The risks of another major leg lower in USD remain elevated, even if our bias is for a short-term recovery, given the overall supporting macro and rates picture. Elsewhere, expect few surprises by the Riksbank today
- Francesco Pesole
- James Knightley
Bank of Canada keeps rates unchanged, and options open
The BoC kept rates at 2.25% as widely expected today. Despite major uncertainty, the bank remains explicitly content with this rate level, and we don't currently forecast any change by year-end. However, options remain open, and the risks appear slightly on the dovish side. We see upside potential for USD/CAD
- Francesco Pesole
- James Knightley
Bank of Canada keeps rates unchanged, and options open
The BoC kept rates at 2.25% as widely expected today. Despite major uncertainty, the bank remains explicitly content with this rate level, and we don't currently forecast any change by year-end. However, options remain open, and the risks appear slightly on the dovish side. We see upside potential for USD/CAD
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Dollar sentiment shifts markedly
Tuesday saw the dollar sell-off extend across the board. There was no fresh catalyst for the move, and President Trump's comments that he was not concerned by the weaker dollar came late in the day. If the buy-side has decided to raise its dollar hedge ratios on US policy risk and a sense that Washington wants a weaker dollar, it makes no sense to stand in the way
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Here's why the dollar sell-off could stall
Conditions in global FX markets are a little calmer today. USD/JPY continues to retrace some of its heavy losses, but EUR/USD remains very bid. We do not see any triggers for big FX moves today, but take the view that the dollar could find support at the bottom of its 2025 trading range
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: The three themes driving global FX right now
It has been a noisy couple of weeks in FX markets, with three key themes in play: 1) Optimism over global growth driving strong gains in commodities and EMFX, 2) Ongoing fears over a captured Fed and the dollar debasement trade, and 3) Weak fiscal positions being exposed by developments in Japanese politics and JGBs. None of these look dollar positive
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Davos relief can bring focus back to macro and Fed
Davos brought a de-escalation in geopolitical and tariff risk, and the dollar can enjoy a bit more support from here, in our view, as focus shifts to a supportive macro picture. Elsewhere, Norway's central bank should not surprise markets today, while New Zealand inflation may well outpace the RBNZ's projections and help NZD, especially in the crosses
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Not trusting the dollar sell-off
We are taking the view that the dollar has some room to recover today. Japanese bonds have rebounded, and US Treasuries and equities are on track to follow higher later today. And with Trump headed to Davos, we see some scope for de-escalation on the Greenland risk and fears of European dumping of US assets. EUR/USD can return below 1.1700 in this environment
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Greenland pressure risks dollar blowback
Not many analysts had the US invading Greenland at the top of their 2026 market outlooks. The weekend tariff move from President Trump has seen gold rallying 2%, equities off 1.0-1.5%, and the dollar under a little pressure. This week's World Economic Forum in Davos will be the venue for much US-European diplomacy and more FX volatility
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: De-dollarisation trend remains elusive
Better US data has seen US rates and the dollar tick a little higher this week. The attack on Powell's Fed has had no impact on the dollar so far, and US November TIC data released last night showed that foreigners were still very happy to pour money into US portfolio assets late last year. The case against the dollar remains hard work
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Cross current to keep ranges intact
Last night's release of the Fed's Beige Book suggests the US economy is doing fine and there is no urgency for the Fed to cut rates. That provides some underlying support for the dollar. But investors continue to look for opportunities outside the US, with seemingly strong flows into EM equities at the start of the year. This all makes for a choppy FX story
- Chris Turner
- David Havrlant
- Deepali Bhargava
- Dmitry Dolgin
- Francesco Pesole
- Lynn Song
- Mateusz Sutowicz
- Min Joo Kang
- Peter Virovacz
- Rafal Benecki
- Valentin Tataru
FX Talking: Choppy waters, Teflon dollar
It's been a choppy start to 2026 for FX markets. Washington's foreign and domestic policy blitzes have so far had little meaningful impact on the dollar, although in the longer term they must add to the de-dollarisation theme. We remain bearish on the dollar this year, but suspect the next leg lower will not start until the second quarter
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Dollar may come out stronger after Fed drama
US CPI was softer than expected yesterday. That reinforces our call for a Fed cut in March, but we doubt markets will join that view for a few more weeks. The dollar has the opportunity to regain more than it lost due to some potential hawkish tilt after the Powell criminal probe. Meanwhile, we'll keep monitoring JPY today alongside Greenland talks
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: CPI can help USD recover as Fed fears ease
The pushback from some Republican lawmakers against the DoJ probe on Fed Chair Powell has eased market nerves. And while more reassurances are likely needed, that may be enough for today, allowing the dollar to continue recovering, as we expect the US December core CPI to come in above consensus at 0.4% MoM. EUR/USD may touch 1.1600 soon
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