reports
- 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
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Attack on Fed carries big USD downside risks
The dollar sold off across the board as the Fed received DoJ subpoenas, reigniting both independence risks and a brief return of ‘sell-America' trade. It's wait-and-see mode now as markets try to assess the effective implications of all this. We'll watch the bond market for any signs of concerning curve steepening. The risks for USD are significant
- Francesco Pesole
Denmark's currency is starting to feel some Greenland effect
Danish krone's forwards have started to imply a higher yield in the past few days. That could mirror hedging against the risk of US intervention in Greenland, but we think that potential ongoing FX intervention by the central bank is exacerbating the moves. Ample FX reserves suggest EUR/DKK stability can be defended without a rate hike for longer
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Fateful Friday
Expectations have grown that today's US jobs report will be decent enough to keep the Fed put for longer, and that the Supreme Court will rule against Trump's tariffs. The combination of those would, in our view, prove modestly USD positive: the greenback has already absorbed some positives of late. Anyway, today's events will set the tone in FX for some time
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Mixed data fails to give direction
US data releases have not given much sense of direction so far. Expectations of a decent jobs report and a potential negative tariff Supreme Court ruling on Friday may offset the negative impact on USD of lower oil prices. Elsewhere, we are monitoring EUR/DKK for the Greenland risk: the central bank may be intervening already
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Data taking back the wheel
Markets are turning a blind eye to geopolitical developments (both Venezuela and Greenland), and data should regain a lot of centrality as a key market driver for the second half of the week. Today, ADP, JOLTS and ISM services releases carry some downside risks for the dollar. The outlook for more rate cuts suggests weaker FX in CEE
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Markets eager to move past Venezuela
The benefits to the dollar from the Venezuelan events lasted half a day, with focus shifting back to data (ISM manufacturing was weak) and equities shrugging off geopolitical risk. But we retain a modest bullish bias on the seasonally favoured dollar in the near term, as the market's sanguine approach leaves risk assets and high-beta currencies exposed
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: BRICS quietly leaving the Treasury market
This week's central bank meetings have not been explosive for FX markets, but have provided some support to sterling and weighed on the yen. We note in the overnight release of US Treasury TIC data for October that the BRICS nations' holdings of US Treasuries continue to edge lower. For today, the focus will be on how far USD/JPY has to rise
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Stretched positioning may be sterling's only friend
PIt is a very busy day for central bank policy meetings in Europe. There are probably some downside risks to the euro and sterling from these event risks, but stretched short positioning may prevent a larger sterling sell-off. We also see some downside risk to the CZK on today's local central bank meeting, where a lower inflation profile could be discussed
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Soft dollar trend remains intact
A soft-looking set of US jobs data yesterday took the DXY dollar index down to the lowest levels since early October. And the big drop in energy prices should prove a boon to the energy-importing currencies in Europe and Asia. For today, the German Ifo could disappoint in line with the local PMI releases, and a speech from the Fed's Waller could be influential
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: EMFX ending the year on a strong footing
EM currencies are generally ending the year on a strong footing – enjoying the benefits of lower core policy rates, a modestly weaker dollar and many offering high carry. There is a lot of focus on the renminbi at the moment and whether China's $1tr trade surplus will drive the renminbi much stronger. For today, the focus is on US jobs and eurozone PMIs
- Chris Turner
- Francesco Pesole
- Frantisek Taborsky
FX Daily: Dollar stays soft ahead of a busy week
The dollar opens the week on the softish side ahead of a very busy schedule of data and central bank meetings in the G10 space. The data highlight will be tomorrow's release of November US payrolls, but we'll also see some key Fed speakers. The theme of which central bankers will be prepared to accept market pricing of 2026 rate hikes remains in focus, too
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